If you are domiciled in a country of the European Union, the interest income of the following investments will be subject to a withholding tax:

• Bonds
  Interest received from most bonds is taxable. This does not apply to 'grandfathered' bonds who will be exempt until 2011. Your account officer can find you such tax-exempt bonds in most currencies.
• Interest income and monetary investments
  Any interest income is taxable, no matter the source.

There is no tax on the capital,  no capital gains tax and no tax ondividends . Hence, if you buy a share today and sell it for double the price tomorrow, no tax will be payable in Switzerland on that operation. Income from mutual funds who are invested in bonds or monetary investments for 40% or more of their value are taxable.

No information will be exchanged with any outside authority and the tax will be collected by the Swiss bank at the source and remitted anonymously to the Swiss government, who will then share it with your country of domicile. This of course doesn't mean that you are not legally required to report the income in your country of residence - ask a local tax accountant if in doubt.