3 Min Read
By John O'Donnell
BRUSSELS, Nov 28 (Reuters) - The European Commission is challenging agreements struck by Britain and Germany with Switzerland for a tax on savings held in Swiss accounts by their nationals, a spokesman for the EU's executive said on Monday.
Britain and Germany agreed deals to impose a tax on savings in Swiss banks but the Commission, which enforces European law, believes they infringe EU rules and may be taking a softer approach to tax evasion. The German tax, for example, is lower than a similar one imposed by Brussels.
"The Commission has been very clear that areas covered by EU legislation must not be included in bilateral agreements between member states and third countries," said a spokeswoman for Algirdas Semeta, the EU commissioner in charge of tax issues.
Commission lawyers have analysed the agreements and Semeta is now considering whether to take legal action, she said.
"Commissioner Semeta is confident that they will find a way of addressing the concerns that the Commission has with these agreements, and will work to remove the parts that impinge on EU law."
A UK finance ministry spokeswoman said Britain was aware the Commission has concerns and was working closely with Brussels to address them.
European Union rules impose a 35 percent tax on the interest earned on its citizens' savings in Switzerland and the Commission wants to widen the rules to apply not only to savings accounts but also to Swiss investment funds.
Pressure on Swiss banking secrecy, which has helped Swiss banks such as UBS and Credit Suisse build up Switzerland's $2 trillion offshore financial sector, has led it to clinch the deals with Britain and Germany.
Other agreements are still in negotiation, such as one with the United States to settle a dispute over Swiss banks helping wealthy Americans dodge U.S. taxes.
Switzerland sees the German and British agreements as a blueprint for others in the EU, for example with Greece.
Foreign nations have voiced their willingness to strike such deals, in part because revenues from the assets would help ease big budget deficits.
Germany recently sought to revisit its Swiss deal, reached in September, after German opposition lawmakers called it too lenient on alleged tax evaders and threatened to block it.