PARIS (AP) — France and Switzerland have signed an agreement on inheritance tax that Paris hopes will help it bring in more money.
Under the agreement signed Thursday, inheritances would be taxed based on where the recipient resides, not where the deceased lived, as used to be the case. France, which taxes inheritance progressively up to 45 percent, compared to Switzerland's maximum of 7 percent, hopes the new agreement will make it harder for people living in France to evade taxes.
Many people cross back and forth over the Swiss-French border, sometimes living on one side and working on the other, or living on one side and shopping on the other — a system that has allowed some to evade France's generally higher taxes. Under the new agreement, in order to claim Swiss residence — and thus the lower tax rate — inheritors will have to prove they have lived there for at least eight years.
France is one of a growing number of cash-strapped governments cracking down on tax avoidance and trying to find tax cheats squirreling away cash in Swiss accounts. The agreement would also allow France to ask Switzerland to investigate suspicious bank activity even if it does not have the suspects' names.
Both countries' parliaments must approve the agreement.