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European Union: EU Signs Agreement with Switzerland to End Banking Secrecy

(June 2, 2015) On May 27, 2015, the European Union and Switzerland signed a new tax transparency agreement. Pierre Moscovici, the EU Commissioner for Economic and Financial Affairs, Taxation and Customs, and Janis Reirs, Latvian Minister of Finance on behalf of the Latvian Presidency of the Council for the EU, and the Swiss State Secretary for International Financial Matters, Jacques de Watteville, signed the documents. (Press Release, European Commission, Fighting Tax Evasion: EU and Switzerland Sign Historic Tax Transparency Agreement (May 27, 2015).) The new agreement is in full compliance with the Organisation for Economic Co-Operation and Development (OECD)/G20 rule that calls for the automatic exchange of information in order to reduce tax evasion worldwide. (Automatic Exchange of Information, OECD website (last visited June 1, 2015).)

The agreement aims to put an end to banking secrecy for EU residents with bank accounts in Switzerland and to assist EU Member States to find tax evaders and improve their ability to collect taxes. To achieve this objective, beginning in 2018 the agreement will require both sides to automatically exchange the financial account information of EU and Swiss residents, including businesses. Consequently, EU Members 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.” (Press Release, supra.)

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. (Id.)

Similar agreements are currently being negotiated between the European Commission and Andorra, Liechtenstein, Monaco, and San Marino. It is expected thatthey will be signed before the end of 2015. (Id.)