Switzerland, United Kingdom to Negotiate A Withholding Tax on Swiss-Based Assets

Switzerland and the United Kingdom have agreed to negotiate a new tax agreement that would require Swiss authorities to collect a withholding tax on the assets of U.K. nationals in Swiss banks and then transfer the receipts to the United Kingdom, the Swiss government announced Oct. 25.

In a statement, the Swiss government said Swiss Finance Minister Hans-Rudolf Merz and U.K. Exchequer Secretary to the Treasury David Gauke signed a declaration on the initiation of negotiations that would lead to the imposition of the withholding tax.

The negotiations also would make it easier for U.K. officials to seek the cooperation of Swiss authorities in suspected cases of tax evasion by U.K. nationals. In return, Swiss banks are expected to secure improved access to the U.K. market for their financial service providers, as well as the decriminalization of certain actions by Swiss banks and their staff under U.K. law.

The two sides are expected to commence at the beginning of 2011, after their respective governments have approved their negotiating mandates, the Swiss government added…(Read more on free trial below)

The full version of this article is in the BNA International Tax Centre.

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