Sunnyvale, CA -- (ReleaseWire) -- 04/24/2012 -- Switzerland and United Kingdom signed a protocol of amendment that supplements their withholding tax agreement of October 6, 2011. The agreement is awaiting approval from the Parliament of both, Switzerland and United Kingdom, to take effect at the beginning of 2013.
According to the Swiss Federal Department of Finance (FDF), interest payments have not been included in the agreement and taxpayers can discharge tax liabilities on interest payments.
Post implementation, the residents of United Kingdom can pay their tax retrospectively, on bank relationships in Switzerland, either by a one-off payment or by disclosing their banking transactions to UK authorities. If accounts were open on December 31, 2010, and remain functional till May 31, 2013, anonymous lump sum amounts can be paid.
For bank clients, the legal structure will change, inheritance will be included to get rid of loopholes, protection of privacy will be ensured and improvements in conditions for mutual market access will be introduced.
Tax tariff will be within the range of 19% to 34%, depending on the asset, initial and final amount of capital held in the account and on the duration of the client-bank relationship.
Furthermore, withholding tax of 48% on investment income and 27% on capital gains will be levied on UK bank clients in Switzerland.
The above payment will satisfy all UK tax liabilities on such transactions (involving investment income/ capital gains). However, those making full disclosures to HMRC need not make such payments.
As per the agreement, UK can make up to 500 requests for information to Swiss authorities in order to prevent deposit of undeclared funds in the future.
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