{"id":9759,"date":"2011-04-26T14:28:14","date_gmt":"2011-04-26T13:28:14","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=9759"},"modified":"2011-04-26T15:22:04","modified_gmt":"2011-04-26T14:22:04","slug":"the-uk-switzerland-tax-agreement-a-grubby-little-arrangement","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2011\/04\/26\/the-uk-switzerland-tax-agreement-a-grubby-little-arrangement\/","title":{"rendered":"The UK Switzerland tax agreement – a grubby little arrangement"},"content":{"rendered":"

As the Telegraph reported on Sunday<\/a>:<\/p>\n

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The European country is known for its banking secrecy and the Treasury estimates tens of thousands of British people have stored \u00a3125bn in its institutions without paying UK tax.<\/p><\/blockquote>\n<\/div>\n

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Any deal is likely to include a withholding tax, taken by the bank on dividend and interest payments, and a levy on previously untaxed income.<\/p><\/blockquote>\n<\/div>\n

The difficulty of this for the UK is threefold.<\/p>\n

First, this deal allows Swiss banking secrecy to continue. That means the abuse will go on, and on, and on. Indeed, it will now have\u00a0official\u00a0sanction. In this circumstances to call this a grubby little arrangement to generate a bit cash is being over kind to it. Candidly, it's the sort of deal no self respecting\u00a0government\u00a0and no self respecting\u00a0tax\u00a0official\u00a0should be seen to have gone\u00a0near.<\/p>\n

Second, only the UK and Germany are doing this. So they break ranks in Europe and undermine attempts to firstly reform the\u00a0European Union Savings Tax Directive and second to create universal automatic information exchange - which is the only way to ensure we really crack tax havens.<\/p>\n

More important though, if the\u00a0European Union Savings Tax Directive is reformed as planned - and I sincerely hope it is, then this is a serious error of judgement. Let Mark Morris, the guru of all things to do with the\u00a0European Union Savings Tax Directive<\/a> explain:<\/p>\n

The tax agreement will be a catastrophic failure because of the revised EU level legislation, which takes primacy over the bilateral agreements:<\/p>\n