A historic tax transparency agreement on the automatic exchange of information on tax matters was signed on Wednesday May 27th 2015, between the EU and Switzerland.
This signifies the end of Swiss bank secrecy for EU residents and will ultimately prevent tax evaders from hiding undeclared income in Swiss bank accounts.
The automatic exchange of information is widely recognized as one of the most effective instruments for fighting tax evasion, as it lifts banking secrecy and facilitates cooperation between tax authorities. Therefore, the purpose of the agreement is to significantly improve the fight against tax evasion and move forward towards fairer taxation in Europe. Under the agreement which will come into effect from 2018 onwards, EU Member States and Switzerland, will automatically exchange information on the financial accounts of each other's residents.
In this respect, Member States will annually receive the personal details of their residents with accounts in Switzerland, including other financial and account balance information. This agreement is expected to improve each Member State's ability to track down and tackle tax evaders, as well as act as a preclusion to hiding income and assets abroad to evade taxes in their home countries. It should be noted that implementation of the current agreement not only will offer greater transparency between Member States, it is fully aligned with the OECD's global standard on automatic exchange of information, as well as the EU Commission's aspiration for making the automatic exchange of information the tax standard throughout the European Union.