From 2018, Switzerland will provide information on EU residents with bank accounts in the country, and the EU will provide the same information on Swiss nationals with accounts in European countries. The data will include names, addresses, tax identification numbers and dates of birth, as well as "a broad set of other financial and account balance information", the European Commission said in a statement.
"EU residents will no longer be able to hide undeclared income in Swiss accounts to evade paying tax," the Commission said.
Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, said: "Today we are taking a decisive step towards total tax transparency between Switzerland and the EU. I am confident that our other neighbours will soon follow suit. This transparency is vital to ensure that each country can collect the tax revenues it is due."
The agreement will replace the taxation of savings agreement with the EU that has been in force since 2005 and will apply for all 28 EU member states, the Swiss federal department of finance said in a statement.
Collection of the data will begin in 2017. The agreement is in line with the new OECD/G20 global standard for the automatic exchange of information, and will be signed following authorisation by the European Council and the Swiss Government, both of which are expected before the summer, the Commission said.
Switzerland is currently negotiating similar information sharing agreements with the US and other countries, it said. An agreement with Australia was signed on 3 March 2015.