Savings tax rules delayed

An EU law cracking down on untaxed expat savings has been postponed six months to give Switzerland time to put its own equivalent measures in place.

Brussels said on Wednesday that the agreement, due to come into force on January 1 next year, would be delayed until July 2005 following an agreement reached by EU diplomats.

Switzerland has said recently that it could not guarantee that its own savings tax system would be ready by January 1.

EU ministers will now on Monday rule that arrangements needed for the EU rules to come into action are not in place.

And the European Commission is expected to put forward July 1 2005 as an alternative kick off date.

National governments hope that the new system will wipe out tax dodgers who move their money to foreign bank accounts - and do not pay tax on it.

But the system relies on equivalent measures in third countries coming into force at the same time.

Bern has agreed, along with other savings havens such as Luxembourg, to exchange bank account details on EU citizens who keep accounts in the country.

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