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For President Eveline Widmer-Schlumpf, the conclusion of the agreement with Austria is yet another indication that Switzerland is serious about its new financial centre strategy. This creates legal certainty and should strengthen the competitiveness and reputation of Switzerland's financial centre in the long term. Switzerland does not want any further untaxed assets in the future.
The tax agreement between Switzerland and Austria corresponds largely to the agreements with Germany and the United Kingdom. There are differences concerning 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.
No advance payment by Swiss banks has been agreed. The inclusion of inheritance was superfluous given that Austria does not have inheritance tax. Moreover, as both contracting parties consider the existing administrative assistance procedure sufficient, no additional enquiry possibilities have been agreed.
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 agreement represents a good result, as it satisfies the interests and requirements of both countries equally well. The tax agreement signed by Switzerland and Austria not only respects the protection of bank clients' privacy applicable in Switzerland but also ensures the implementation of the Austrian authorities' legitimate tax claims.
Both sides acknowledge that the agreed system will have a long-term impact that is equivalent to the automatic exchange of information in the area of capital income.
The agreement requires the approval of parliament in both countries, and should enter into force at the start of 2013.