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Switzerland Announces Watered-Down Plan to Avoid Untaxed Assets

On Behalf of | Dec 18, 2012 | Uncategorized |

Reuters is reporting that on December 14, 2012, the Swiss government announced a plan in an effort to clean up the country’s image as a haven for untaxed assets. The plan, however, fell short of a requirement which would have required banking clients to prove that they had paid tax in their respective home country.

For decades, Switzerland’s bank secrecy laws have helped the country build up a $2 trillion wealth management industry. Mounting international pressure from U.S. and German tax authorities, among others, has forced the Switzerland to take steps to make sure clients are not skirting the tax laws of the other tax jurisdictions.

Under pressure from cash-strapped governments cracking down on tax evaders, Switzerland has made concessions over its cherished banking secrecy and vowed no longer to accept untaxed money.

But the government said it would be up to banks to decide whether to ask new clients to confirm in writing they had paid tax on their deposits, giving in to banks’ concern that such a “self-declaration” would place all clients under suspicion.

Swiss authorities said that in 2013, they would publish a check list of criteria for banks to use for operating financial accounts.

“Banks can choose whether a self-declaration is part of their check list,” Finance Minister Eveline Widmer-Schlumpf said at a media briefing, falling short of an automatic requirement for bank clients to prove they paid tax which had been urged by left-wing parties.

The Swiss Bankers’ Association (SBA), which rejected obligatory self-declaration, welcomed the proposal. “No bank in the world can be made responsible for the tax compliance of its clients,” it said in a statement.

Switzerland already has agreements with Britain and Austria, set to take effect in 2013, that will allow their citizens to pay tax on secret accounts without revealing taxpayer’s identity.

To read the Reuters article, click here.


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