FAQs on the Changes in the European Savings Tax Directive

Please find here information related to the changes in the European Savings Tax Directive (ESD) that have entered into force in 2011.

On 1 January 2011, the following changes in the European Savings Tax Directive (ESD) have entered into force:

  • Exemption rule relating to grandfathering for bonds first issued before 1 March 2001 and, if applicable, increased before 1 March 2002, was revoked on 1 January 2011. From this date, the debt instruments in question will be subject to the EU Directive. Only bonds subject to the gross-up clause are excepted. For these instruments, the grandfathering rule will continue to apply after 1 January 2011. These instruments are therefore exempt from the EU Savings Taxation.
  • The threshold value for determining the tax status of a fund has been lowered from 40% to 25% of interest-bearing instruments. The new threshold value will apply from 1 January 2011.

What has changed on January 1, 2011?

Lowering of de minimis threshold for funds from 40% to 25%.

  • Elimination of grandfathered status for debt securities.
  • Continuation only for instruments where the debtor is subject to a gross-up clause or early redemption clause for tax purposes.

List of instruments affected

SIX Financial Information provides customers subscribed to the "EUZS service" (ESD service) with a free list of the instruments affected, i.e. those subject to the gross-up clause and those that will lose their grandfathered status on 1 January 2011. If you would like to receive this list, please contact:

sales.global@six-financial-information.com

Customers who are not subscribed to the "EUZS service" (ESD service) can purchase the list for a separate fee. Please contact:

sales.global@six-financial-information.com

Related Content

Grandfathered Bonds

Changes in the European Savings Tax Directive: FAQs on what has changed for the so called "Grandfathered Bonds".

New Funds Threshold

Changes in the European Savings Tax Directive: FAQs on the new funds threshold.