Switzerland, Austria Will Sign Tax Deal

April 13, 2012 Taxation in AustriaTaxation in Switzerland

Tax deal goes hidden swiss bank accountsVIENNA – The governments of Switzerland and Austria could sign a new tax agreement within a matter of the next few days, potentially leading to the recovery of more than EUR 1 billion in previously unpaid taxes in Austria.

In an interview given to the Austrian media on April 12th the national Minister of Finance Maria Fekter revealed that Austria and Switzerland are ready to sign a tax deal, which could dramatically reduce the use Swiss banks accounts by Austrian taxpayers avoiding their tax obligations.

In her interview Maria Fekter indicated that the Ministry of Finance of Austria are ready, and will, sign the deal as soon as possible, saying that she is scheduled to be in Berne on April 13th to meet the Minister of Finance of Switzerland Eveline Widmer-Schlumpf in order to finalize the details of the agreement. She indicated further that if the deal can be finished on Friday, the agreement would be signed on the same day. Currently, this proposed agreement is being described by officials in both countries as “agreed to in principal”.

The new agreement is modeled after similar deals already signed by Switzerland with the UK and Germany. If implemented, it will require Swiss banks to charge a withholding tax on any money already held in bank accounts belonging to Austrian nationals. Withholding taxes will also be levied on incomes received into the accounts in the future. The deal will not require Swiss authorities to reveal the names of the account holders, allowing the country to maintain a degree of banking confidentiality.

According to the Austrian government, national taxpayers currently have as much as EUR 20 billion hidden away in undeclared Swiss bank accounts, and it estimates that the new tax deal could result in up to EUR 1 billion in recovered tax revenues.

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