Tax evaders will now be prevented from hiding undeclared income in Swiss accounts

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This morning, the EU and Switzerland signed a new tax transparency agreement that will improve the fight against tax evasion. Both sides will now automatically exchange information on the financial accounts of each other’s residents from 2018. This spells an end to Swiss bank secrecy for EU residents and will prevent tax evaders from hiding undeclared income in Swiss accounts.

The agreement was signed by commissioner Pierre Moscovici and Janis Reirs, Latvian minister of finance on behalf of the Latvian Presidency of the Council for the EU, and by the Swiss state secretary for international financial matters, Jacques de Watteville.

Moscovici said: “Today’s agreement heralds a new era of tax transparency and cooperation between the EU and Switzerland. It is another blow against tax evaders and another leap towards fairer taxation in Europe. The EU led the way on the automatic exchange of information, in the hope that our international partners would follow. This agreement is proof of what EU ambition and determination can achieve.”

The automatic exchange of information is recognised as one of the most effective instruments for fighting tax evasion. It provides tax authorities with essential information about their residents’ foreign income, so that they can assess and collect the taxes that are due on them.

Under the agreement, member states will receive, annually, the names, addresses, tax identification numbers and dates of birth of their residents with accounts in Switzerland, as well as other financial and account balance information. This means member states will be able to track down and tackle tax evaders, who should be deterred against hiding income and assets abroad to evade taxes.

The EU is currently concluding negotiations for similar agreements with Andorra, Liechtenstein, Monaco and San Marino, which are expected to be signed before the end of the year.