Blog

20
Aug

Comments to the Swiss-German tax deal

On the opinion of Mark Morris, the expert in the EU Savings tax directive, new tax agreement is ineffective

On the 10th of August 2011 Swiss-German tax deal signed, which established a onetime levy ranging from 19% up to 34% on assets depending on value / time assets have been in Switzerland. Also a withholding tax rate of 26,375% on future interest, dividends and capital gains were agreed.

But before the Swiss initial promised 30 euro billion onetime payment to get the tax negotiations started. Now it’s only CHF 2 billion.

Germany agreed to the tax because the EU savings tax was so ineffective. It would seem the Swiss-German flat tax agreement will be just as ineffective. The tax agreement does not include pensions, insurance, directors’ fees, employment income, life insurance, other insurance, annuities, royalties, property income and property ownership.

And it is unlikely the EU Commission will allow Germany to agree to a lower rate in a bilateral agreement than the 35% mandated as per the EU savings tax directive.