EU Savings Tax and Tax Fact Sheets
The EU Savings Tax Directive and possible solutions
Simply put, the European Savings Tax Directive (EUSD) is an agreement to automatically withhold or exchange information about customers who earn savings income in one nation but who reside in another. It became law in all EU member states, dependent territories and a number of additional nations known as 'third countries' on the 1st of July 2005. If you have money in a bank account outside of your country of residence, then the days of keeping this secret and not having to pay tax on the income are gone.
Automatic exchange of information is the ultimate objective of the EUSD, but certain member states have instead adopted a policy of automatically withholding tax. The level of tax withheld on a customer's account started at 15% in 2005, by July 2008 this will have risen to 20% and by 2011 the tax automatically withheld will be a massive 35%.
The directive took over 15 years to agree but happily there are solutions.
The Key Facts
- The Directive DOES affect those with onshore and offshore bank accounts, deposits and interest bearing instruments.
- The Directive does NOT affect general life assurance, some forms of equity investments or offshore portfolio bonds.
- There are many rumours that the directive will soon apply to bank accounts in most major countries around the world and not just the EU.
- There ARE solutions available that allow you to legally not have this tax deducted on interest.
Your first step is to speak to one of Abbey Financial Solutions specialist advisers to ascertain what can be done to minimize the effect of the EU Savings Directive on your finances. Contact Abbey Financial Solutions today.
Country Specific Tax Information
Abbey Financial Solutions can provide you free, country specific tax fact sheets in order to assist you with your planning. To ensure that the information that you are seeking is relevant and that you are fully aware of all the advantages and country specific benefits of your expatriate status, please contact Abbey today and we will be happy to have an adviser call you to discuss your options.
