AN AGREEMENT between the UK and Switzerland for a withholding tax on the accounts of UK citizens is still not certain, a leading consultant has said.
A withholding agreement, which will see Swiss banks taking tax on interest earned by UK account holders on behalf of HM Revenue & Customs, was expected to be announced in May. However, there is still no indication that a deal will be announced soon.
Philip Marcovici, who was the architect of the agreement between Liechtenstein and the UK and now consults for Liechtenstein firm Kaiser Witter, said that it was likely an agreement would eventually be reached.
However, he said: “There probably will be a Swiss agreement but I don’t think anyone can say with certainty that there will be one. There are many issues that are likely to arise between the two countries and whether they come to the agreement at the end of the day remains to be seen. We’ve seen nothing formal so far that they have come to an agreement. It remains uncertain.”
Any agreement that is reached would be “incomparable” with the agreement with Liechtenstein, he added.
“What is being discussed as part of the Swiss deal and Liechtenstein’s arrangements with the UK are completely different. Liechtenstein said to the UK, we want to move forward hand in hand with the UK government to help address clients’ undeclared funds.
“The Swiss approach implies that the UK government cannot be trusted – if you give your name that somehow compromises your human right to privacy. But it doesn’t compromise your privacy rights to provide related information to the UK tax authorities because under UK law, information received by HMRC remains confidential,” he said.
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