Swiss to make hunt for tax cheats easier
Berne, February 15, 2011
Switzerland will make it easier to help other countries hunt tax evaders, reacting to criticism that its requirements are still too restrictive even after it eased bank secrecy, the finance minister said.
Switzerland would provide so-called administrative assistance more easily to other countries after a peer review showed that its requirements were still too strict, Finance Minister Eveline Widmer-Schlumpf told a news conference.
After a global campaign against tax havens, Switzerland agreed in 2009 to soften its strict bank secrecy, pledging to comply with standards set by the Organisation for Economic Cooperation and Development (OECD).
But Widmer-Schlumpf said a review by the Global Forum on Transparency and Exchange of Information for Tax Purposes that started in October 2010 suggested Switzerland's requirements could still hinder the effective sharing of information.
"The peer review found that we are too restrictive in some double-taxation agreements with regards to the name and the holder of the information," she said.
Switzerland, the world's biggest offshore banking centre, had to sign at least 12 bilateral tax deals to be removed from an OECD "grey list" of tax havens after threats of sanctions by the Group of 20 most powerful countries.
Widmer-Schlumpf said the Alpine country would run the risk of renewed repercussions from the OECD, the G20 or its trade partners should it fail to comply.
"We can avoid that in a pragmatic way, so we should do it and not add a burden to our economy," she said.
Tax agreements already sealed with other countries should be amended to allow assistance even in cases where the name and the address of the suspect is not known, by allowing other means to identify the person, such as bank account details.
In some cases, existing agreements already included a broader definition of how to identify potential tax evaders. For example, the deal struck with the United States allows other identification beyond just a name and the agreement with France allows other ways to identify the bank name of a suspect.
The United States had been pushing particularly hard to crack Swiss bank secrecy and Switzerland was forced to hand over data on some 4,200 clients of its largest bank UBS to end a US investigation into tax dodging via secret accounts.
Widmer-Schlumpf said the changes, which are likely to come before the Swiss parliament in June, should not disadvantage Switzerland as other financial centres have also agreed to uphold the OECD standards.
She said that in about 5 percent of cases when foreign authorities do not have the name of the potential tax cheat, other means that clearly identify the person such as bank account details should be sufficient, adding that "fishing expeditions" would still not be allowed. - Reuters