Switzerland has signed the controversial inheritance tax deal with France aimed at avoiding double taxation in the area of inheritance tax.
Under the agreement, inheritances would be taxed based on where the recipient resides, not where the deceased lived, as it used to be earlier.
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France, which taxes inheritance progressively up to 45%, compared to Switzerland’s maximum of 7%, expects the new deal will make it harder for France residents to evade taxes and will pull in more money from wealthy tax dodgers.
The new text provides that France can tax heirs and beneficiaries resident in France, although deducts any inheritance tax paid in Switzerland.
Heirs and beneficiaries of the deceased who are resident in Switzerland must have been resident in France for at least eight out of ten years prior to the period of receipt, in order for France to be able to exercise its taxing power.
French Finance Minister Moscovici said that the deal constitutes significant progress in the fight against tax exile and tax evasion, as well as in strengthening bilateral dialogue between France and Switzerland.
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By GlobalDataThe deal will allow France to ask Switzerland to investigate suspicious bank activity even if it does not have the suspects’ names and facilitate information exchange between two countries permitting requests and group requests, even if the taxpayers’ banking details are not know.
France is one of a growing number of cash strapped governments trying to find tax cheats squirreling away cash in Swiss accounts.
The Organisation of the Swiss Abroad (OSA) has criticised the agreement saying it failed to take into account the interests of the nearly 190,000 Swiss expatriates in France.
