EU Savings Tax Directive

Understand how EU tax agreements could affect your international savings

EU countries share tax information

Since 1 July 2005, European Union Member States have automatically exchanged tax information to help ensure that people pay the correct level of tax on their worldwide income.

This exchange of information is due to an agreement called the EU Savings Tax Directive (EUSTD), approved by the EU Council of Ministers on 3 June 2003.

How the directive is applied

Member states can apply the EUSTD in either of 2 ways:

  • exchange of information: used by the majority of EU member states
  • a withholding tax: used in Austria, Belgium and Luxembourg

Exchange of information

Under this option, EU member states automatically exchange information about people who earn savings income in one EU Member State but reside in another.

For example: if a resident of France holds a bank account in Germany, the German tax authorities will provide information about the account to the French tax authorities. This will include all the details the bank provided about the customer and the interest payments on their account.

Withholding tax

Under this option, banks don't supply information to the tax authorities, either in the bank's State or in the State where the customer resides.

Instead, the bank automatically withholds tax from interest paid to customers who reside in other EU Member States. It is the bank's responsibility to pay the tax on behalf of the customer.

The jurisdiction must give the customer a way to demonstrate their tax situation via a certificate system — the customer obtains a certificate from their local tax authority which details the source of the interest payment.

Customers can also choose automatic exchange of information, instead of paying the withholding tax.

Rates of withholding tax:

  • 2005 onwards (from 1 July): 15%
  • 2008 onwards (from 1 July): 20%
  • 2011 onwards (from 1 July): 35%

For more information, see our EUSTD frequently asked questions.

We can't give tax advice. To make sure you understand how the EU Savings Tax directive applies to you, speak to your tax adviser. As an international Account holder, you can get tax advice through our partners.

It is your responsibility to ensure that any tax liability in relation to funds deposited is accounted for by you to your appropriate tax authorities.

This information is based on our understanding of current law and tax authority practice and may be liable to change, which could be with retrospective effect. No liability can be accepted for the effect of any subsequent legislation or change of official practice.