The launch of EU rules to tax its citizens' savings abroad could be delayed by at least six months as Switzerland says it cannot commit to the expected start date, European Union officials said today.
Under the rules, EU states are to share bank account details, allowing the home country to tax the savings, or the country where the savings are held will tax the savings directly, leaving banking secrecy rules in place.
Switzerland, which is outside the EU but is seen as a key partner in fighting tax evasion, will take the direct taxation option.
Switzerland has successfully insisted on protecting banking secrecy as the cornerstone of its large banking industry but now says the extra red tape facing its banks plus complex local legislative rules mean the launch of tax rules will take time.
The EU is keen that its 25 members and non-EU neighbours launch the legislation at the same time to keep EU citizens from moving their funds even further out of the reach of the tax authorities.
Diplomats in Brussels said that in last-minute talks yesterday, Switzerland was not able to commit firmly to the targeted January 1 start date, making a delay likely. "The most probable date seems to be that of July 1, 2005," an EU diplomat said.