BASEL: The withholding tax (WHT) agreement between Switzerland and Austria will be terminated on January 1, 2017, when the agreement between Switzerland and the EU on the automatic exchange of tax information enters into force.
On November 11, 2016, Switzerland and Austria signed an agreement to ensure a smooth transition between the two regimes. It governs the arrangements for transferring the final tax amounts and forwarding the last voluntary disclosures to the Austrian authorities. “The provisions of the withholding tax agreement will continue to apply for all facts and legal rights that materialized during its period of validity,” the Swiss Federal Council said.
The WHT between Switzerland and Austria entered into force on January 1, 2013. It provided for the regularization of assets held in Switzerland by Austrian taxpayers and the taxation of income generatedby these assets. Austrian taxpayers had the option of either paying a WHT levied directly on their accounts and anonymously transmitted to the Austrian authorities, or making a voluntary disclosure.
The Swiss Federal Council said this model “loses its reason to exist at all with the introduction of the automatic exchange of information between Switzerland and the EU as of January 1, 2017.”
The agreement with the EU will replace the EU-Switzerland taxation of savings agreement that has been in force since 2005. Under the deal, parties will receive, on an annual basis, the names, addresses, tax identification numbers, and dates of birth of their residents with accounts in contracting states, along with other financial and account balance information.
