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The withholding tax agreement between Switzerland and Austria was signed on 13 April 2012 and is largely the same as the agreements with Germany and the United Kingdom. The differences concern primarily the applicable tax rates. The rate for the flat-rate one-off payment for regularising the past is between 15% and 38% depending on the duration of the banking relationship and the amount of assets concerned. A single rate of 25% applies for the taxation of future investment income. This corresponds to Austria's capital gains tax. Switzerland and Austria have also agreed to eliminate important obstacles for cross-border financial services and ease the conditions for banking licences in Austria. The distribution of securities funds will be simplified.The withholding tax agreements are an important component of the Federal Council's financial centre strategy. They make it possible for foreign taxpayers who hold bank accounts in Switzerland to be taxed efficiently in accordance with the regulations of their country of domicile while safeguarding their privacy. For the contracting parties, the agreed system will have a long-term impact which is equivalent to the automatic exchange of information in the area of investment income.
United Kingdom makes use of most favoured nation clause
Exercising the most favoured nation clause agreed by Switzerland and the United Kingdom in the Protocol of Amendment of 20 March 2012, both contracting parties have amended the tax rates in the UK agreement. These are to be brought into line with the rates in the German agreement, i.e. the minimum rate for regularising the past will be raised from 19% to 21%, and the maximum rate will be raised from 34% to 41%. This amendment will not affect non-UK domiciled individuals; their flat rate of 34% will remain unchanged.