The UK Swiss Rubik Agreement: What You Need to Know

On 14 December 2020, the United Kingdom and Switzerland signed the UK Swiss Rubik Agreement, which aims to strengthen the bilateral economic relationship between the two countries. The agreement has been in negotiation since 2013, and its conclusion is a significant accomplishment for both nations.

The UK Swiss Rubik Agreement is named after the Rubik cube, which is a popular puzzle game that was invented by a Hungarian professor, Erno Rubik. The agreement is similar to the puzzle game in the sense that it is a complex negotiation that involves various factors that need to be aligned for it to work.

What is the UK Swiss Rubik Agreement?

The UK Swiss Rubik Agreement is a tax agreement that aims to regulate the undisclosed assets of UK taxpayers held in Swiss banks. The agreement requires Swiss banks to provide HM Revenue and Customs (HMRC) with information about UK taxpayers` accounts in Switzerland.

The agreement is similar to the UK Liechtenstein Disclosure Facility (LDF), which was introduced in 2009 and aimed to encourage UK taxpayers with undisclosed assets to declare them voluntarily. The LDF was successful, and the UK Swiss Rubik Agreement aims to build on that success.

How does it work?

The UK Swiss Rubik Agreement requires Swiss banks to disclose information about their UK clients to HMRC. The agreement requires Swiss banks to pay a one-off levy on the value of the UK clients` assets held in Switzerland. The levy ranges from 21% to 41% depending on the level of the UK taxpayer`s undeclared assets.

The agreement also provides for a withholding tax on Swiss payments made to UK taxpayers. The withholding tax rates vary depending on the type of payment, ranging from 27% to 40%. The withholding tax is designed to ensure that UK taxpayers pay the correct amount of tax on their Swiss income.

Who will benefit from the agreement?

The UK Swiss Rubik Agreement will benefit both the UK and Switzerland. For the UK, it will provide a significant boost in tax revenue. For Switzerland, it will help to strengthen its position as a leading global financial hub.

The agreement is also beneficial for UK taxpayers with undisclosed assets in Switzerland. The agreement provides a time-limited opportunity for UK taxpayers to regularize their tax affairs in Switzerland. By voluntarily disclosing their assets, UK taxpayers can avoid penalties and prosecution.

Conclusion

The UK Swiss Rubik Agreement is a complex negotiation that has been in the works for several years. The agreement aims to regulate the undisclosed assets of UK taxpayers held in Swiss banks and requires Swiss banks to provide information about their UK clients to HMRC.

The agreement will benefit both the UK and Switzerland and provide a time-limited opportunity for UK taxpayers to regularize their tax affairs in Switzerland. Overall, the UK Swiss Rubik Agreement is a positive development for both countries and a significant accomplishment for those involved in the negotiations.