EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 11.10.2004 
COM(2004)669 final 
  
Proposal for a 
COUNCIL DECISION 
on the signature of the Agreem ent in the form of an exch ange of letters between the 
European Community and the Swiss Confederat ion on the date of application of the 
Agreement between the European Community and the Swiss Confederation providing 
for measures equivalent to those laid down  in Council Directive 2003/48/EC of 3 June 
2003 on taxation of savings income in  the form of interest payments 
(presented by the Commission) 
 
EN 2   EN EXPLANATORY MEMORANDUM  
On 2 June 2004, the Council adopted a Decision on the signing and conclusion of the 
Agreement between the European Community and the Swiss Confederation providing for 
measures equivalent to those laid down in Council Directive 2003/48/EC on taxation of 
savings income in the form of interest payments1.  
Pursuant to Article 17(2) of the Agreement, th e parties must effectively implement and apply 
it by 1 January 2005. However, Article 18(1) provi des that the application of the Agreement 
will be conditional on the adoption and implementation by the dependent or associated territories of the Member States mentioned in the report of the Council (Economic and Financial Questions) to the Eu ropean Council of Santa Mari a da Feira of 19 and 20 June 
2000, as well as by the United States of Ameri ca, Andorra, Liechtenstein, Monaco and San 
Marino respectively of measures which conform with or are equi valent to those contained in 
the Directive or the Agreement, with the ex ception of article 15 of the Agreement, and 
providing for the same dates of implementation. 
Article 18 (2) provides that the Contracting Parties shall decide, by common accord, at least 
six months before the date referred to in Ar ticle 17(2) (1 January 2005), whether the condition 
set out in paragraph 1 will be met having regard to the dates of en try into force of the relevant 
measures in the third States and dependent or associated territories concerned. Article 18 (2) 
of the Agreement also provides that if the Contracting Parties do not decide that the condition will be met, they shall, by common accord, adopt a new date for the purposes of Article 17(2).  
The Contracting Parties did not , prior to 30 June 2004, decide that the condition in Article 
18(1) would be met. In the negotiations betw een the Community and Switzerland, it became 
clear that Switzerland will not be in the positi on to apply the measures provided for in the 
Agreement from 1 January 2005. Nor will it be possi ble for all the third countries concerned 
to implement and apply their respective agreements  effectively before that date. Subject to the 
fulfilment of its constitutional requirements, Sw itzerland will, however, be  able to apply these 
measures from 1 July 2005. The Swiss Government  will do its utmost to ensure that the date 
of 1 July 2005 will be respected. 
In view of the foregoing, the Council noted that the conditi on set out in Article 17 (2) of 
Council Directive 2003/48/EC
2 will not be met with respect to  Switzerland in relation to the 
date of application of 1 Ja nuary 2005 and invited the Comm ission to present a proposal 
providing for 1 July 2005 as th e new date of application of the Directive. On 25 June 2004, 
the Commission adopted a proposal for a Council Decision on the date of application of the 
Directive3. This proposal was adopted by the Council on 19 July 2004.4 
It is necessary to also reflect this new date  of application in the Agreement between the 
Community and Switzerland. In accordance with Article 18 (2) of the Agreement, a draft 
exchange of letters was initialled on 25 June 2004, expressing the agreement of the Contracting Parties to adopt the date of 1 July 2005 as the new date for the purposes of Article 
17 (2) of the Agreement. It may be noted that  Switzerland is obliged to apply the provisions 
                                                
 
1 OJ L , .2004, p 
2 OJ L 157, 26.6.2003, p.38 
3 OJ C , .2004, p 
4 OJ L 257, 4.8.2004, p. 7 
 
EN 3   EN of the Agreement as from 1 July 2005 only if all Member States and each of the countries and 
territories mentioned in Article 18 (1) of the Agreement apply the savings tax measures 
mentioned therein from that same date. The same condition also applies for each Member State.  
The proposal for a Council Decision provides for the signature of this exchange of letters.  
 
EN 4   EN Proposal for a 
COUNCIL DECISION 
on the signature of the Agreem ent in the form of an exch ange of letters between the 
European Community and the Swiss Confederat ion on the date of application of the 
Agreement between the European Community and the Swiss Confederation providing 
for measures equivalent to those laid down  in Council Directive 2003/48/EC of 3 June 
2003 on taxation of savings income in  the form of interest payments 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty esta blishing the European Communit y, and in particular Article 
94 in conjunction with Article 300 (2), first subparagraph, thereof, 
Having regard to the proposal from the Commission5, 
Whereas: (1) Article 17 (2) of the Agreement between the European Community and the Swiss 
Confederation providing for measures e quivalent to those laid down in Council 
Directive 2003/48/EC on taxation of savings in come in the form of interest payments 
provides that, subject to the conditions set out therein, Switzerland and where 
applicable the Community shall effectively implement and apply this Agreement from 
1 January 2005.  
(2) However, pursuant to Article 18(1), the a pplication of the Agreement is conditional on 
the adoption and implementation by certain depe ndent or associated territories of the 
Member States and by the United States of America, Andorra, Liechtenstein, Monaco and San Marino respectively of measures wh ich conform with or are equivalent to 
those contained in the Directive or the Agreement. Under Article 18(2), if the 
Contracting Parties do not, at least six mont hs prior to 1 January 2005, decide that the 
condition will be met, they shall, by common accord, adopt a new date for the 
purposes of Article 17(2). 
(3) The Contracting Parties made no such d ecision six months prior to 1 January 2005. 
Not all the third countries in question will be in a position to implement their respective Agreements by that date. Moreover,  it will only be possible for Switzerland 
to implement and apply this Agreement from 1 July 2005 and this on the condition that Swiss constitutional requirements will be me t by that date. It appears that each of 
the third countries and dependent  or associated territories referred to in Article 18 (1) 
of the Agreement will also be able to meet the conditions set out in that paragraph by 1 
July 2005.  
                                                
 
5 OJ C , .2004, p 
 
EN 5   EN (4) In accordance with Article 18 (2) of the Agreement, the date of 1 July 2005 should 
therefore be adopted as the new date for the purposes of Article 17 (2) of the Agreement.  
(5) It is desirable to sign the Agreement in th e form of an exchange of letters which was 
initialled on 25 June 2004. 
HAS DECIDED AS FOLLOWS:  
Article 1 
The President of the Council is hereby authorised  to designate the persons empowered to sign 
on behalf of the Community the Agreement in the form of an exchange of letters between the European Community and the Swiss Confederat ion on the date of application of the 
Agreement between the European Community and the Swiss Confederation providing for 
measures equivalent to those laid down in  Council Directive 2003/48/EC of 3 June 2003 on 
taxation of savings income in the form of interest payments. 
The text of the Agreement is attached to this Decision. 
Article 2 
This Decision shall be published in the Official Journal of the European Union . 
Done at Brussels,  
 For the Council 
 The President 
 
EN 6   EN ANNEX  
Agreement in the form of an exchange of le tters between the European Community and the 
Swiss Confederation on the date of applica tion of the Agreement between the European 
Community and the Swiss Confederation providing  for measures equivalent to those laid 
down in Council Directive 2003/48/EC of 3 June  2003 on taxation of savings income in the 
form of interest payments 
 
EN 7   EN A. Letter of the European Community  
Sir, I have the honour to refer to the Agreement between the Eur opean Community and the Swiss 
Confederation providing for measures equivale nt to those laid down in Council Directive 
2003/48/EC on taxation of savings income in the form of interest payments. The Agreement, 
which will be ratified or approved by the Cont racting Parties in accordance with their own 
procedures, will be applied from a date determ ined in accordance with the procedure set out 
in Article 18 (2) of the Agreement.  
Article 18(2) provides that the Contracting Parties shall decide  by common accord at least six 
months before the date referred to in Article 17(2) of the Ag reement (1 January 2005) whether 
the condition set out in article 18(1) of the Ag reement will be met and if they do not decide 
that the condition will be met shall adopt, by common accord, a new date for application of 
the Agreement. 
Article 18(1) provides that the application of the Agreement will be conditional on the 
adoption and implementation by th e dependent or associated terr itories of the Member States 
mentioned in the report of the Council (Economic and Financial Questions) to the European Council of Santa Maria da Feira of 19 and 20 J une 2000, as well as by the United States of 
America, Andorra, Liechtenstein, Monaco and San Marino respectively of measures which 
conform with or are equivalent to those containe d in the Directive or the Agreement, with the 
exception of article 15 of the Agreement, and providing for the same dates of implementation. 
On the basis of the negotiations that have taken place between the European Community and 
the Swiss Confederation I understand that it will in accordance with Article 17 (2) of the 
Agreement only be possible for the Swiss Confed eration to apply the Agreement from 1 July 
2005 and this on the understanding that Swiss constitutional requirements will be met by that date. 
I request your confirmation that  the date of 1 July 2005 is ac ceptable to you as the new date 
for application of the Agreement as provided fo r in Article 18(2) of the Agreement and that 
the Swiss Government will do its utmost to ensure  that this date will be respected. I also 
request you to confirm that on the basis of th e information provided in the negotiations held 
on 21 June 2004, and without prejudice to the ne xt paragraph the Swiss Confederation accepts 
that the conditions of Article 18(1) will be met. 
I accept that Switzerland is obliged to apply th e provisions of the Agreement as from 1 July 
2005 only if all EU Member States  and each of the countries and territories mentioned in 
Article 18 (1) of the Agreement apply the savings tax measures mentioned therein from that same date. The same condition shall also apply for each EU Member State. 
Please accept, Sir, the assurance of our highest consideration,  
 
EN 8   EN B. Letter of the Swiss Confederation  
Sir,  I have the honour to acknowledge  receipt of your letter of ….., which reads as follows: 
'Sir, I have the honour to refer to the Agreement between the Eur opean Community and the Swiss 
Confederation providing for measures equivale nt to those laid down in Council Directive 
2003/48/EC on taxation of savings income in the form of interest payments. The Agreement, 
which will be ratified or approved by the Cont racting Parties in accordance with their own 
procedures, will be applied from a date determ ined in accordance with the procedure set out 
in Article 18 (2) of the Agreement.  
Article 18(2) provides that the Contracting Parties sh all decide by common accord at least six 
months before the date referred to in Article 17(2) of the Ag reement (1 January 2005) whether 
the condition set out in article 18(1) of the Ag reement will be met and if they do not decide 
that the condition will be met shall adopt, by common accord, a new date for application of 
the Agreement. 
Article 18(1) provides that the application of the Agreement will be conditional on the 
adoption and implementation by th e dependent or associated terr itories of the Member States 
mentioned in the report of the Council (Economic and Financial Questions) to the European Council of Santa Maria da Feira of 19 and 20 J une 2000, as well as by the United States of 
America, Andorra, Liechtenstein, Monaco and San Marino respectively of measures which 
conform with or are equivalent to those containe d in the Directive or the Agreement, with the 
exception of article 15 of the Agreement, and providing for the same dates of implementation. 
On the basis of the negotiations that have taken place between the European Community and 
the Swiss Confederation I understand that it will in accordance with Article 17 (2) of the 
Agreement only be possible for the Swiss Confed eration to apply the Agreement from 1 July 
2005 and this on the understanding that Swiss constitutional requirements will be met by that 
date. 
I request your confirmation that  the date of 1 July 2005 is ac ceptable to you as the new date 
for application of the Agreement as provided fo r in Article 18(2) of the Agreement and that 
the Swiss Government will do its utmost to ensure  that this date will be respected. I also 
request you to confirm that on the basis of th e information provided in the negotiations held 
on 21 June 2004, and without prejudice to the ne xt paragraph the Swiss Confederation accepts 
that the conditions of Article 18(1) will be met. 
I accept that Switzerland is obliged to apply th e provisions of the Agreement as from 1 July 
2005 only if all EU Member States  and each of the countries and territories mentioned in 
Article 18 (1) of the Agreement apply the savings tax measures mentioned therein from that same date. The same condition shall also apply for each EU Member State. 
Please accept, Sir, the assurance of our highest consideration,' 
On the basis of the negotiations that have taken place between the European Community and 
the Swiss Confederation I am able to confirm the agreement of the Sw iss Confederation to a 
 
EN 9   EN new date of application of the aforementioned Agreement of 1 July 2005 on the condition that 
Swiss constitutional requirements will be met by that date. I confirm that the Swiss Government will do its utmost to ensure  that this date will be respected. 
I confirm that subject to technical verification by my services of the information provided in 
the negotiations held on 21 June 2004, which w ill be confirmed by me in advance of the 
signing of the Agreement on the ba sis of finalised versions of the appropriate agreements, the 
Swiss Confederation accepts that the conditions of Article 18(1) will be met without prejudice 
to the point made in the following paragraph. 
I agree that Switzerland is obliged to apply th e provisions of the Agreement as from 1 July 
2005 only if all EU-Member States and each of the countries and territories mentioned in Art. 
18 (1) of the Agreement apply th e savings tax measures menti oned therein from that same 
date. I accept that the same condition shall al so apply for each EU Member State.  
Please accept, Sir, the assurance of our highest consideration,