The European Union and Switzerland signed a major accord Wednesday that will end banking secrecy for EU residents and prevent them from hiding undeclared income in Swiss banks, the European Commission said.

The agreement deals "another blow against tax evaders, and (represents) another leap towards fairer taxation in Europe," said Pierre Moscovici, the EU commissioner for tax issues.

Moscovici signed the accord, which takes effect in 2018, along with Jacques de Watteville, the Swiss secretary of  state for international financial matters and Latvian Finance Minister Janis Reirs, whose country currently holds the EU presidency.

"The EU led the way on the automatic exchange of information, in the hope that our international partners would follow," Moscovici said in a statement.

"This agreement is proof of what EU ambition and determination can achieve."

Under the accord, the EU and Switzerland will automatically exchange information on the bank accounts held by their respective residents beginning in 2018.

"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 European Commission said.

The EU executive is negotiating similar accords with Andorra, Liechtenstein, Monaco and San Marino that are expected to be signed by the end of the year.