Switzerland caves in on tax-evasion fight

[GTI]

This is what happens when you're surrounded by playa haters

Switzerland caves in to pressure and signs up to tax-evasion fight

Graeme Wearden
guardian.co.uk, Friday 13 March 2009 14.26 GMT


Switzerland has caved into the growing pressure on tax havens by pledging to co-operate with international standards on tax evasion.
In a landmark decision, the Swiss government said this morning it will adopt Organisation for Economic Co-operation and Development standards, which state that countries should work together on cases of suspected tax evasion.
Switzerland had resisted the rules on international tax and data sharing, but the threat of being blacklisted by the OECD has prompted it to relax its stance.
"Banking secrecy does not protect tax crimes. International co-operation on taxes has become more important given the globalisation of financial markets and in particular against the background of the financial crisis," Swiss president and finance minister Hans-Rudolf Merz told a news conference today.
Merz added, though, that Swiss banks would not now automatically surrender details of their clients, and suggested an amnesty for existing customers might be needed. Switzerland has traditionally not seen tax evasion by foreigners as a crime.
The move comes a day after Liechtenstein said it would start sharing information about suspected tax evaders. Earlier this week, Jersey signed up to a tax information agreement with the UK. With Austria and Andorra also pledging to co-operate, campaigners believe the days of the tax haven may be numbered.
Tax havens are set to be a key issue at the gathering of G20 finance ministers this weekend in London. Barack Obama has led the charge against international tax havens, which he believes cost America billions of dollars a year in lost revenue.
Swiss bank UBS is caught in a battle with US authorities over allegations that tens of thousands of American citizens banked with the company to evade US taxes. It has agreed to pay a $780m (£564m) fine, but is resisting demands to surrender 50,000 names.
Jean Schaffner, a tax partner at Allen & Overy based in Luxembourg, said today's move from Switzerland was "a good compromise between the need to co-operate with foreign tax administrations and the desire to preserve privacy".
The move has divided the country's coalition government. The right-wing Swiss People's Party claimed that the government had "betrayed citizens and bank customers".
"With its fearful attitude to do everything possible not to be blacklisted, the government has once again allowed itself to be blackmailed ... With today's decision the government is sacrificing a centuries-old principle of protecting citizens," it claimed.
But the Swiss Social Democratic Party, the second largest behind the People's Party, said it was an important step.
"This is a foreign policy signal to all those countries which rightly criticise Switzerland for protecting tax flight," it said.


The extent to which companies and individuals are using overseas tax havens to legally dodge tax has been exposed in an ongoing investigation by the Guardian. The Tax Gap investigation found Royal Bank of Scotland used a series of tax avoidance schemes to avoid paying £500m to British and US revenues. Many other FTSE-listed companies have also used complex financial structures to cut their tax liabilities.

Oxfam added its voice to the anger over tax havens today: the charity said they cost governments around the world up to $124bn a year in lost taxes – more than their yearly $103bn in foreign aid.
"The financial crisis shows our leaders can no longer afford to stand idly by whilst tax havens take billions of pounds from the pockets of taxpayers in rich and poor countries alike," said Kirsty Hughes, Oxfam head of policy and advocacy. "Reform of tax havens would be an easy win for our leaders that would benefit ordinary people at home and abroad alike. There is no longer any excuse for delay."

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[wakadoo]

back to stuffing my cash in the mattress then....lol.