Tell me more
Instant accounts
Fixed & notice accounts
Structured products
Useful information
Investing
European Union Savings Directive
EU Savings Directive
The European Union Savings Directive (EUSD) is an agreement between the Member States of the European Union (EU) to exchange information about customers who earn savings income in one EU Member State but live in another. Some non-EU countries and jurisdictions have voluntarily put into place the same or equivalent measures - these include Jersey, Guernsey and the Isle of Man.
On 1 July 2011 important changes to the way account(s) are affected by the European Union Savings Directive were introduced.
Does the directive affect me?
If you are resident in an EU Member State and earn savings income on deposits or investments held in your own name, it is likely that you will be affected by the directive. The directive does not apply to anyone who lives outside the EU.
Savings income is defined by the directive as:
- interest earned on bank deposits, such as savings accounts
- interest from certain bonds and proceeds on their sale or redemption
- income from certain types of investment funds
Any accounts that pay credit interest are affected. Under current guidance, the returns generated by our structured deposit products should not be affected. However, please note that it is still your responsibility to declare any relevant returns to your local tax authority.
Most other types of income, i.e. dividends on ordinary or preference shares of companies, salary and pension payments, fall outside the definition and so are outside the scope of the directive.
What changed on 1 July 2011?
Some jurisdictions have reviewed their commitment to the directive and have removed the Retention Tax option in favour of exchanging information with the local tax authority.
Please review the guidance for your jurisdiction noting that Structured Deposit and Structured Deposit Cash Management accounts may be held in the Isle of Man.
On 1 July 2011, the Guernsey Government withdrew the option for customers to pay Retention Tax on savings income. Therefore, we are required to provide information on all EU resident customers who earn savings income on deposits or investments.
Any savings interest will be paid to you without the deduction of Retention Tax and we will send the local Guernsey tax authority information regarding your identity and residence, the amount of savings income earned and the period it relates to. This information is then forwarded to the tax authority of the country where you are resident.
This information is collated and submitted annually for the calendar year, 1 January to 31 December.
Please note that it is your responsibility to declare any relevant returns to your local tax authority.
EUSD exemption certificate
If you provided a formal EUSD exemption certificate from your home tax authority before 1 July 2011, you should be exempt from information exchange.
If you were unable to provide a certificate before 1 July 2011 then we will automatically provide interest information to the Guernsey Government. If you provide one after this date we will update our records as quickly as possible but if you have been paid credit interest in between these points this information will be exchanged.
On 1 July 2011, the Government of the Isle of Man withdrew the option for customers to pay Retention Tax on savings income or claim exemption from EUSD. Therefore, we are required to provide information on all EU resident customers who earn savings income on deposits or investments.
Any savings interest will be paid to you without the deduction of Retention Tax and we will send the local Isle of Man tax authority information regarding your identity and residence, the amount of savings income earned and the period it relates to. This information is then forwarded to the tax authority of the country where you are resident.
This information is collated and submitted annually for the period from 6 April to 5 April the following year.
Please note that it is your responsibility to declare any relevant returns to your local tax authority.
For new customers
In order to open an account after 1 July 2011 customers are asked to agree, within the terms and conditions of business, to the exchange of certain information with the local Jersey tax authority.
Any savings interest will be paid to you without the deduction of Retention Tax and we will send the local tax authority information regarding your identity and residence, the amount of savings income earned and the period it relates to. This information is then forwarded to the tax authority of the country where you are resident.
This information is collated and submitted annually for the calendar year, 1 January to 31 December.
Certain customers may be able to claim exemption from EUSD. In order to do this you will need to provide us with a certified copy of a formal EUSD exemption certificate from your home tax authority.
Please note that it is your responsibility to declare any relevant returns to your local tax authority.
Existing customers
On 1 July 2011, the rate of retention tax charged under the European Union Savings Directive increased from 20% to 35%. You don’t need to take any action as the changes will take place automatically.
As an alternative to paying Retention Tax, you may wish to consider allowing us to exchange information about you with the Jersey Government. If you choose this option we will pay interest gross then exchange information about your identity and residence, savings interest earned and the period this relates to. This will then be shared with the tax authority of the country where you are resident.
This information is collated and submitted annually for the calendar year, 1 January to 31 December.
If you wish to exchange information we will need you to authorise us to do so in writing. Please download and complete the election form for exchange of information (PDF, 73KB) or, alternatively, contact us and we can send you one to complete and return.
Please note that it is your responsibility to declare any relevant returns to your local tax authority.
If you change your country of residence please tell us as this may change the information that is sent to your tax authority.
The directive covers all EU Member States. The jurisdictions which have voluntarily agreed to apply the same or equivalent measures are the UK Crown Dependencies and UK Overseas Territories, the Dependent Territories of the Netherlands, and some other ‘Third Countries’.
| EU Member States | Other Countries, Dependencies and Territories |
|---|---|
| Austria | Andorra |
| Belgium | Anguilla |
| Bulgaria | Aruba |
| Czech Republic | British Virgin Islands |
| Denmark | Cayman Islands |
| Estonia | Curacao |
| Finland | Guernsey |
| France | Isle of Man |
| Germany | Jersey |
| Greece | Liechtenstein |
| Hungary | Monaco |
| Ireland | Montserrat |
| Italy | San Marino |
| Latvia | St Martin |
| Lithuania | Switzerland |
| Luxembourg | Turk and Caicos Islands |
| Malta | |
| Netherlands | |
| Poland | |
| Portugal | |
| Republic of Cyprus | |
| Romania | |
| Slovakia | |
| Slovenia | |
| Spain | |
| Sweden | |
| UK |
- What is the European Union Savings Directive?
- What is ‘savings income’?
- Are all of my accounts affected by the directive?
- What is exchange of information and how will it work?
- How does this fit with the data protection legislation and customer confidentiality?
- How will the interest earned on joint accounts be treated?
- Are companies affected by the directive?
- When did the directive come into effect?
What is the European Union Savings Directive?
It is an agreement between the Member States of the European Union (EU) to exchange information about customers who earn savings income in one EU Member State but live in another.
Some jurisdictions have voluntarily put into place the same or equivalent measures. These include Jersey, Guernsey and the Isle of Man. In some circumstances retention tax may be allowable.
What is ‘savings income’?
Savings income as defined by the directive means:
- interest earned on bank deposits, such as savings accounts
- interest from certain bonds and proceeds on their sale or redemption
- income from certain types of investment funds
Most other types of income - for example, dividends on ordinary or preference shares of companies, salary and pension payments - fall outside the definition and so are outside the scope of the directive.
Are all of my accounts affected by the directive?
Any accounts that pay credit interest will be affected - for example savings accounts and fixed-term deposits. Under current guidance, structured deposit accounts should not be affected unless they have a fixed deposit element. Please note that structured deposit and Structured Deposit Cash Management accounts may be held in the Isle of Man.
It is still your responsibility to declare any relevant returns to your local tax authority.
What is exchange of information and how will it work?
For individuals with accounts in the jurisdictions we send our local tax authority information about your identity and residence, the amount of savings income earned and the period it relates to. This information is then forwarded to the tax authority of the country where you are resident and may be compared by them with your tax returns.
How does this fit with the data protection legislation and customer confidentiality?
All the jurisdictions have comprehensive data protection legislation and well-established common-law principles on customer confidentiality. As laid out in our Terms and Conditions we only divulge information regarding your account where required to do so by law or with your specific authority.
How will the interest earned on joint accounts be treated?
Interest earned on accounts held in two or more different names will be treated on the basis that it has been earned equally among the account holders. Additionally, individual residency status will also be applied so only those accounts holders who are EU residents will be subject to information exchange
Are companies affected by the directive?
The directive only applies to payments of savings income to individuals and certain other special types of organisation. Legal entities, including companies, and certain other entities (for example Partnerships and certain Trusts) are not affected by the directive.
When did the directive come into effect?
The directive came into force on 1 July 2005 and has been amended in 2008 and 2011.
