EU SAVING TAX
Sam Orgill of ProACT Partnership on savings tax
What is EU Savings Tax? A new tax introduced by the EU to ensure that EU citizens pay tax on bank deposits and investment.
How will it work? In the country you live bank deposits and investment income will be paid net of tax. This withholding tax in
Investors using ‘offshore’ accounts and investments to receive gross interest will fall under the EU Savings tax net. For years people have forgotten to declare this income in their tax returns. From now on your bank will tell on you!
The offshore banks have become tax paying agents and must offer one of two options to all clients - the automatic exchange of information option and the withholding tax option.
Which other countries and territories are affected?
In effect all offshore banking and investment centres are cooperating with the EU Savings Tax regime.
Why and how does the ESD affect savings income? If tax is withheld it starts at 15% and rises to 35% over 4 years. If you request exchange of information you pay tax in your country of residence. Up to 40% in the
When does the ESD take effect? From 1st July 2005.
Can I avoid Paying EU Savings Tax? Yes there are ways. But you must review how you hold your deposits and investments.
How can I find out more? ProACT Partnership can review and advise you how to minimise your tax bill in a way that is best for you.
Talk to ProACT Expat Experts Tel + 357 26 819 424
Email info@proactcyprus.com
