The EU claims that the deal contradicts the EU Savings Directive, a mechanism which allows member states to tax certain investments held by residents in other member states and certain third countries, including Switzerland.

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The Swiss-UK bilateral tax deal, which is due to come into force in 2013, provides for a tax to be imposed on future income and for a one-off charge to be imposed on undeclared assets.

Similarly, the Swiss-German deal provides for the future taxation of income earned by German taxpayers through accounts held in Switzerland from January 1, 2013 by means of a withholding tax, with the proceeds derived from the levy subsequently being transferred to the German authorities.

European Union law calls for imposing a 35% tax on the interest earned on its citizens’ savings in Switzerland and the Commission wants to widen the rules to apply not only to savings accounts but also to Swiss investment funds.

The European Union is also against the ‘anonymity’ clause in the deals, which protects the secrecy of tax evaders. The Commission wants to bring into place a system which will ensure automatic exchange of information between Switzerland and EU member nations.

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Both German and British governments see tax accord deals with Switzerland as major source of revenue for their cash-strapped Treasury coffers.

Switzerland has been planning to negotiate more bilateral tax agreements with other individual European Union member states but this new development could also hamper progress in that direction.