Tax evasion: EU-Switzerland sign deal 'to end banking secrecy'

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The EU and Switzerland have signed an agreement that is intended to clamp down on tax evasion, the European Commission has said.

From 2018, EU residents will be prevented from hiding undeclared income in Swiss banks.

The EU and Switzerland will exchange information on the bank accounts which their respective citizens hold.

The EU Commission said it was a "deterrent" against hiding income abroad.

"This new transparency should not only improve member states' ability to track down and tackle tax evaders, but it should also act as a deterrent against hiding income and assets abroad to evade taxes" the EU Commission said.

The Commission is also negotiating similar agreements with Andorra, Liechtenstein and Monaco.

EU commissioner Pierre Moscovici said that the agreed automatic exchange of information was "another blow against tax evaders and (represents) another leap towards fairer taxation in Europe".

It follows an agreement for "strengthened transparency" made between EU member states last year.