The EU Savings Tax Directive

The European Savings Tax Directive (EUSD) came into force on the 1st July, 2005. It was an agreement that all EU member states, dependent territories and a number of third country nations automatically exchange information about customers who earn savings income in one nation but who reside in another.

Whilst automatic exchange of information was the objective, some member states have instead adopted a policy of automatically withholding tax. The level of tax withheld on a customer’s account is currently 20% and by 2011 this will be a massive 35%.

It is no use trying to bury your head in the sand if you have an onshore or offshore bank account bearing interest. It is fairly certain that at some stage you will be caught if you don’t declare it.

However, the Directive DOES NOT affect general life assurance, some forms of equity investments or portfolio bonds providing they are approved in your country of domicile or where you pay tax.

To find out what options are available to you that allow you to legally not have tax deducted on interest please contact us below.