The EUSD came into effect in July 2005, and was implemented as a way to automatically exchange information between EU member states, thereby meaning those that save in one country but reside in another such as a British Expatriate Residing in Spain with bank accounts in the UK and Jersey for example would have information automatically exchanged between his banks and tax authority in Spain. The objective of the EUSD is to tackle cross-border tax evasion.
Certain associated countries or third countries such as Switzerland, Luxembourg, The Isle of Man, Jersey etc were permitted to impose a withholding tax instead of exchange of information for a limited time. This withholding tax started at 15% and is now at the level of 35%. In recent changes The Isle of Man and Guernsey have adopted the automatic exchange of information and removed the option for withholding tax. Jersey and Luxembourg will follow suit from 2015.
Andorra, Anguilla, Aruba, Belgium, British Virgin Islands, Cayman Islands, Channel Islands, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Isle of Man, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, Monaco, Montserrat, Netherlands, Antilles, Poland, Portugal, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turks and Caicos, United Kingdom.
The scope of the EUSD is to increase the scope and definition of savings income in the future.
There are ways to ensure you reduce your liability to tax, whilst remaining compliant in your country of residence. Contact your local adviser today in Cyprus, France, Italy, Spain or Portugal to find out how you can lower your exposure to tax on your savings and investment income.