A Protocol delivering comprehensive exchange of information up to OECD and international tax standards between Switzerland and the UK, which covers UK taxes of all kinds, was signed in London today by The Financial Secretary to the Treasury, the Right Honourable Stephen Timms MP and the Swiss Ambassador to the UK, His Excellency Alexis P Lautenberg.
Stephen Timms said:
“I very much welcome the Swiss Federal Council’s agreement on international co-operation in tax matters and their adoption of the OECD standard on administrative assistance.
“The days when hiding money off-shore represented a viable means of evading UK tax are rapidly drawing to a close.”
Dave Hartnett, HMRC’s Permanent Secretary for Tax, added:
“Transparency and information exchange are the foundation on which fair and effective tax systems are built. I am delighted that there is growing global recognition of the inevitability of properly regulated information exchange as the key to proper tax visibility.”
The text of the agreement can be accessed on the HMRC website by following the link below:
http://www.hmrc.gov.uk/international/switzerland-eoi.pdf
and will in due course be laid as Schedules to a draft Order in Council for consideration by the House of Commons. It will then also be available from the Stationery Office. The Protocol will come into force as soon as each government has completed the necessary procedures to give effect to it under its domestic laws.
Notes to editors
1. On 13 March 2009 the Swiss Federal Council announced that Switzerland would change policy on international cooperation in tax matters and adopt the OECD standard on administrative assistance in tax matters under Article 26 of the OECD Model Double Taxation Convention. The decision will permit exchange of information on tax matters in individual cases where a specific and justified request has been made.
2. The Protocol provides for comprehensive exchange of information to the OECD and international tax standard in respect of UK taxes of all kinds. It will also insert an arbitration provision into the mutual agreement procedure article. Such a provision is important to businesses because it ensures the elimination of double taxation in the rare cases where two tax authorities cannot agree on the allocation of taxing rights between themselves, such as in a transfer pricing case.
3. Double Taxation Agreements and Arrangements aim to eliminate the double taxation of income arising in one territory and paid to residents of another. They do this by dividing the taxing rights that each territory has under its domestic law over the same income. More generally, they benefit the taxpayer by ensuring certainty of treatment and, as far as possible, by reducing compliance burdens.
4. The UK currently has over 100 Double Taxation Agreements (DTAs) in force, and has signed nine comprehensive Tax Information Exchange Agreements (TIEAs), with Bermuda (in force), the Isle of Man (in force), the British Virgin Islands (signed in 2008), Guernsey (signed in January 2009), Jersey (signed in March 2009), Anguilla and the Turks & Caicos Islands (both signed in July 2009), Liechtenstein (signed on 11 August) and Gibraltar (signed on 27 August). The UK also signed an arrangement with the Cayman Islands in June 2009 that provides, among other things, for information exchange to OECD standards. More TIEAs are being negotiated.
Issued by HM Revenue & Customs Press Office
NAT 58/09
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