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Withholding Tax Agreement Switzerland Uk

Withholding tax agreement between Switzerland and the UK: What you need to know

Switzerland and the UK have signed a new withholding tax agreement which will come into effect on 1 January 2019. This agreement aims to improve tax compliance and prevent tax evasion between the two countries.

What is withholding tax?

Withholding tax is a tax that is deducted at source from certain types of income, such as dividends and interest. The tax is deducted by the payer of the income before it is paid to the recipient.

What is the agreement between Switzerland and the UK?

Under the new withholding tax agreement, Swiss banks and other financial institutions will be required to deduct a withholding tax on income earned by UK residents from their Swiss accounts. The tax rate will be set at 20% for dividends and 35% for interest.

The agreement also includes provisions for exchanging information between the tax authorities of both countries. This means that the UK tax authorities will be able to access information about UK residents` Swiss accounts, and the Swiss tax authorities will be able to access information about Swiss residents` UK accounts.

Why is this agreement important?

This agreement is important because it aims to improve tax compliance and prevent tax evasion. It will ensure that UK residents with Swiss accounts are paying their fair share of taxes, and it will provide the UK tax authorities with more information about offshore accounts.

In addition, the agreement will help to strengthen the relationship between Switzerland and the UK. It demonstrates a commitment by both countries to work together to tackle tax evasion and improve transparency in the financial sector.

What should UK residents with Swiss accounts do?

UK residents with Swiss accounts should be aware of the new withholding tax agreement and the tax rates that will apply. They should also be prepared to provide information about their Swiss accounts to the UK tax authorities if requested.

It is important for UK residents to ensure that they are complying with all tax laws and reporting requirements. Failure to do so could result in penalties and other consequences.

In conclusion, the new withholding tax agreement between Switzerland and the UK is an important step towards improving tax compliance and preventing tax evasion. It will benefit both countries and strengthen their relationship. UK residents with Swiss accounts should be aware of the new agreement and ensure that they are complying with all tax laws and reporting requirements.

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