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UK, Swiss Tax Deal Imminent

August 2011 - Tax & Private Client. Legal Developments by Hassans.

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The UK looks certain to join Germany in securing a lucrative tax deal with Switzerland, with both Swiss and British authorities claiming a deal is imminent.

Switzerland and Germany initialled their agreement last week, aiming at ending a long-standing dispute on the taxation of German capital income held in Swiss accounts. The agreement will allow German residents to retrospectively legitimize their existing banking relationships in Switzerland either by making a one-off tax payment or by disclosing their accounts. A final withholding tax will be levied on any future investment income and capital gains received by German bank clients in Switzerland, with the proceeds transferred to German authorities.

Now it appears that parallel negotiations with the UK are set to come to a successful conclusion, also. Speaking with Swiss newspaper SonntagsZeitung at the weekend, Patrick Odier, head of the Swiss Bankers Association, said that an agreement is on the cards. He said, "I have no doubt that we will strike a deal with Britain very soon". Odier added, "I hope that the conclusion comes in the coming weeks".

Odier's comments were echoed somewhat by the UK's Chancellor George Osborne during a radio interview on August 13. Osborne told the BBC's Today Programme that, as part of the government's crackdown on tax evasion, he is seeking a tax deal with the Swiss authorities, to prevent the type of tax avoidance previously seen there.

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