This note applies to individual and holders of joint accounts who are residents of EU Member states. Individual resident outside EU are generally not affected, although if you hold a passport issued by an EU Member state, you should also read on.

The EUSD is an agreement between the EU Member States to automatically exchange of information with each other about customers who earn savings income in one EU Member state but reside in another. It was approved by the EU Council of Ministers on 03/06/2003 and came into effect from 01/07/2005. The directive can be applied in two ways (Exchange of Information or Withholding tax).

The EUSD extends to a number of forms of saving income and not only to interests paid on bank accounts. These are interests from, and the proceeds of sale or redemption of, certain bonds and income from certain type of investments funds. The Directive affects:

• Interests paid or credited to accounts 
• Interests rolled up when the balance is repaid 
• Interest paid out on debt-claims (this would include all UK Government securities and certain other types of bonds) 
• Interest accrued and paid out on the above when debt-claims are sold 
• Distribution made by certain unit trusts and other open ended collective instruments funds which have invested more than 15% of their investments in debt claims 
• Accumulated income paid out when units in certain collective investment funds that have invested more than 25% of their investments in debt claims are redeemed, repaid or sold

For a transitional period, Luxembourg has been allowed to apply a withholding tax, instead of engaging in the automatic exchange of information. To align with the rest of Europe, from 01.01.2015 the country has now introduced the automatic exchange of information.

The law of 23 December 2005 ("Law introducing a domestic withholding tax on certain interest income on interest payments") introduced new tax provisions for Luxembourg taxpayers. As one of the main features, since 1 January 2006, certain income interest received in Luxembourg by a natural person resident in Luxembourg have been subject to a final withholding tax of 20%.

Income on which the withholding tax has been levied should not be subject to any further income tax.

The Common Reporting Standard (hereafter “CRS”) is a regulation initiated by the OECD, aiming at preventing tax evasion and leading to a global automatic exchange of information between CRS-participating jurisdictions. A CRS participating jurisdiction (or “CRS jurisdiction”) is a country that agreed to implement the CRS. The CRS has been implemented at European Union level through the Directive on Administrative Cooperation (Directive 2014/107/UE), known as “DAC 2”. Relationships with non-EU countries are ruled by mean of multilateral agreements known as “Competent Authority Agreements”. The CRS requires financial institutions to report financial accounts held, directly or indirectly, by account holders that are tax residents in a CRS jurisdiction. . For further information please consult the OECD website.

CRS in Luxembourg

On 18 December 2015 the Luxembourg law on the automatic exchange of financial account information in the field of taxation (“CRS Law”) was introduced requiring Luxembourg's financial institutions to identify bank accounts to be communicated on the basis of residency indicia established by the OECD Common Reporting Standard. The first exchange of information took place in 2017 and concerned financial data relating to the financial year 2016. From this point onward the report is due each year (prior to 30 June) for the previous calendar year.

Which data are reported?

Essentially the same information must be reported under the CRS as under FATCA but there is a broad definition of what constitutes a financial account.

The information reported to the tax authorities are:

• of a non-financial nature: name, address, country(ies) of residence, tax identification number, date and place of birth for individuals, and
• of a financial nature: account number, account balance, accounts closed as well as the total gross amount of interests, dividends and other income, the total gross proceeds of sales and repayments of financial assets credited to the account(s) during the calendar year.

Clients may receive a copy of the personal and financial information reported. Clients may also exercise their right of rectification of personal data, as provided for under the General Data Protection Regulation (GDPR), in order to ensure that accurate and up-to-date data will be communicated to the tax authorities. If a data subject wishes to exercise this right to rectification, he or she may, at any time, contact the following e-mail address: dpo.lu@swissquote.lu

What does CRS means for Swissquote customers?

Swissquote will determine if customers enter into the CRS field of application and will be legally obliged to report these to the relevant tax authorities. All new customers will be required to provide their tax residence(s) for tax purposes, and their tax identification number(s). Without this information, Swissquote will be unable to open an account for the applicant.

Please be advised that Swissquote Bank Europe S.A. is not authorised to provide tax advice to its clients. For questions with regard to the identification of your tax residence status, please contact your tax advisor or competent tax authority.

Swissquote Bank Europe doesn’t withhold the Tax on Stock-exchange Transactions at source. The Bank provides Belgian residents with a monthly statement listing all necessary information required to file and pay the TST to the Belgian tax authorities. The applicable rates and amounts of tax are pre-calculated. The report is available in the Documents section of your Swissquote account.

The tax form to return to the Belgian authorities is available on the SPF Finances website.