The European Union (EU) and Switzerland have signed an agreement on the exchange of bank account data held by their respective citizens.
Putting an end to bank secrecy for EU residents, the latest tax transparency agreement will prevent them from concealing undeclared income in Swiss banks, beginning 2018.
EU Commissioner Pierre 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."
By exchanging information pertaining to bank accounts, tax authorities will be able to obtain essential information about their residents’ foreign accounts.
Based on this information, the authorities can evaluate and collect the taxes that are due on them, the EU said.
The new EU-Swiss agreement is in accordance with the strengthened transparency requirements agreed by the member states amongst themselves in 2014. It iis also consistent with the new Organisation for Economic Co-operation and Development (OECD)/G20 global standard.
Under the terms of the agreement, details of the residents, including the names, addresses, and tax identification numbers will be provided to the member states annually.
Besides, dates of birth along with the amount of money held in their Swiss accounts and other financial and account balance information will be provided to the states helping them to identify and deal with tax evaders.
The commission is also in the process of finalizing negotiations for similar agreements with Andorra, Liechtenstein, Monaco and San Marino with plans to sign them before the year-end.
Image: The agreement aims to strengthen transparency among EU countries. Photo: courtesy of Stuart Miles / FreeDigitalPhotos.net