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Possible 2nd US tax deal blasted
Source: Agencies |
September 6, 2011, Tuesday
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THE Swiss Bankers Association lashed out yesterday at the possibility of another tax treaty with the United States aimed at handing over details of Americans suspected of using Swiss banks to cheat on their taxes.
The trade group's chairman, Patrick Odier, urged the Swiss people and the government to "put up a united front" and work out a solution that applies to all countries. He said that US and Swiss politicians must work with existing accords.
"The solution must be globally applicable, be definitive and correspond to existing Swiss law," Odier told the association at a meeting in Basel, Switzerland, according to his prepared remarks. "A second bilateral treaty has to be avoided and the US needs to respect this."
A double taxation agreement was approved by Switzerland in 2009, but is still awaiting ratification by the US Senate.
The US last year forced Switzerland to agree to a separate bilateral tax treaty - and to break its own banking secrecy laws - in order to prevent the country's biggest bank, UBS AG, from facing damaging civil litigation in US courts for helping thousands of Americans hide money in offshore accounts.
UBS was forced to hand over the names of thousands of American account holders and pay a US$780 million fine, in a landmark case that pierced Switzerland's storied tradition of banking secrecy. Swiss lawmakers are due to approve a revised tax agreement with the US this fall.
But Switzerland now fears that US officials may try to bring charges against one or more Swiss banks, including Credit Suisse Group, if it does not divulge more details on how many Americans may have used Swiss banks to avoid paying their US taxes.
Switzerland has also faced similar growing pressure outside the US, and has signed revised pacts with several countries, including Germany and Britain, to provide greater help to foreign tax authorities seeking data on their citizens' accounts in the Alpine nation.
Taken together, the moves have been widely seen as the beginning of the end of Switzerland's strict policy of noncooperation with foreign tax authorities.
"The US should take the tax agreements with Germany and the United Kingdom as an example. Bilateral problems between friendly nations should be solved by mutual agreement," Odier said.
The deals with Germany and Britain were both reached in August. Swiss banks will pay an up-front guarantee of 2 billion Swiss francs (US$2.7 billion) to Germany and 500 million Swiss francs to Britain.
The association said also there may be rough times ahead because of the strong franc and new banking rules to boost capital holdings.
The trade group's chairman, Patrick Odier, urged the Swiss people and the government to "put up a united front" and work out a solution that applies to all countries. He said that US and Swiss politicians must work with existing accords.
"The solution must be globally applicable, be definitive and correspond to existing Swiss law," Odier told the association at a meeting in Basel, Switzerland, according to his prepared remarks. "A second bilateral treaty has to be avoided and the US needs to respect this."
A double taxation agreement was approved by Switzerland in 2009, but is still awaiting ratification by the US Senate.
The US last year forced Switzerland to agree to a separate bilateral tax treaty - and to break its own banking secrecy laws - in order to prevent the country's biggest bank, UBS AG, from facing damaging civil litigation in US courts for helping thousands of Americans hide money in offshore accounts.
UBS was forced to hand over the names of thousands of American account holders and pay a US$780 million fine, in a landmark case that pierced Switzerland's storied tradition of banking secrecy. Swiss lawmakers are due to approve a revised tax agreement with the US this fall.
But Switzerland now fears that US officials may try to bring charges against one or more Swiss banks, including Credit Suisse Group, if it does not divulge more details on how many Americans may have used Swiss banks to avoid paying their US taxes.
Switzerland has also faced similar growing pressure outside the US, and has signed revised pacts with several countries, including Germany and Britain, to provide greater help to foreign tax authorities seeking data on their citizens' accounts in the Alpine nation.
Taken together, the moves have been widely seen as the beginning of the end of Switzerland's strict policy of noncooperation with foreign tax authorities.
"The US should take the tax agreements with Germany and the United Kingdom as an example. Bilateral problems between friendly nations should be solved by mutual agreement," Odier said.
The deals with Germany and Britain were both reached in August. Swiss banks will pay an up-front guarantee of 2 billion Swiss francs (US$2.7 billion) to Germany and 500 million Swiss francs to Britain.
The association said also there may be rough times ahead because of the strong franc and new banking rules to boost capital holdings.
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