EU postpones Savings Directive
(12/12/2004)
The European Union has announced the temporary postponement of its Savings Directive which will now come into effect on 1 July, 2005 - six months later than originally intended. This delay is due to Switzerland?s inability to pass the required legislation in time for the Directive to come into force at the start of next year.
The EU Savings Directive imposes a new rule whereby offshore interest paid on savings and investments will be taxed directly at source. Hitherto offshore investors have benefited from what?s called ?gross rollup? and, to a large degree, could select the year when a tax liability would be reckoned with. Under the new system, a withholding tax of 15 per cent would be levied at source on all savings and investments held offshore. The Directive requires the 25 EU member states to exchange information on all interest that is earned by non-residents or to directly levy the withholding tax on that income. Switzerland is not a member of the EU but it does come under the label ?third countries?. These are countries which have agreed to co-operate with the Directive and include the Channel Islands and the Isle of Man.
You may request further information on the EU Savings Directive by completing our online Information Request Form.
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