UK-Swiss Confederation Taxation Cooperation Agreement

The Tax Agreement between the UK and Switzerland was signed on 6 October 2011 by the Exchequer Secretary David Gauke and the Swiss Finance Minister Eveline Widmer-Schlumpf.

On 20 March 2012 the UK and Switzerland signed a Protocol to the Tax Agreement. This:

Clarifies the relationship between the Agreement and the EU Savings Agreement (EUSA) with Switzerland. Where a relevant person has suffered withholding tax under the EUSA, an additional 13 per cent 'tax finality payment' will need to be paid to obtain tax clearance under the terms of the Agreement. This achieves the same effect as the 48 per cent withholding tax levied under the original terms of the Agreement.
Introduces a new Inheritance Tax levy on the death of the relevant person unless their personal representatives authorise the Swiss bank to disclose the account details to the UK.

Article XVIII of the Protocol gave the UK the right to have any beneficial changes in the operation of the formula which calculates the one-off payment for the past agreed between Switzerland and Germany incorporated into the UK Agreement.

On 18 April 2012 letters were exchanged informing Switzerland that the UK wished to exercise this right. This means that:

The minimum rate payable will increase from 19 per cent to 21 per cent.
Where under the original formula the tax rate applied in a specific case would have been 34 per cent, and that rate would have been applied to at least £1 million in relevant assets, then the tax rate applied will increase in steps of one percentage point for each additional £1 million, up to a maximum of 41 per cent. This means that the rate payable on £7 million or more will be 41 per cent.

The Agreement is not yet in force. It will enter into force after both Contracting States have completed the necessary Parliamentary procedures required by domestic law and exchanged diplomatic notes. The Agreement will not take effect before 1 January 2013. Further guidance will be provided prior to that date.

On 6 December 2011, the Government published draft legislation to be included in Finance Bill 2012. The draft legislation is being amended to reflect the terms of the Protocol.

Responses to frequently asked questions

If you have any questions regarding the implementation of the agreement email them to UK - Swiss Agreement.

You can read the text of the Agreement, the Protocol and associated declarations by following the links below.

UK/Swiss Protocol - Letters to implement changes to the formula which calculates the one-off payment for the past (PDF 118K)

Protocol to the Tax Agreement between the UK and Switzerland (PDF 62K)

Agreement between the Swiss Confederation and the UK on co-operation in the area of taxation (PDF 166K)

Joint Declaration concerning the equivalence of the Agreement (PDF 9K)

Declaration concerning the acquisition of customer data stolen from Swiss banks (PDF 8K)

Letter from HMRC on criminal investigations (PDF 10K)

Agreed minutes (PDF 9K)

Memo produced by HMT after meeting with Swiss bankers on issues raised in respect of cross border financial services (PDF 173K)

Note associated with the memorandum (PDF 9K)