The
Swiss parliament has agreed that foreign tax authorities will be able to make
grouped requests for administrative assistance, specifying suspected tax
avoiders by behaviour patterns rather than by name. Unless challenged by
foreign clients, the law will come into effect in January 2013.Parliament has approved grouped requests for administrative assistance on tax matters in line with international standards - further weakening Switzerland’s banking secrecy law.
The move follows pressure to crack down on tax evasion. See
Troubled times for Swiss Bankers & End of Banking Secrecy for Switzerland?
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Swiss banks no longer solicit, and often do not accept, deposits from middle-class and moderately wealthy persons resident abroad. Under the UK and perhaps certain other DTCs those at risk under the new rules can avoid disclosure by closing their accounts now. The very wealthy, and political kleptocrats from the Third World, can afford the expertise (or the private banks will provide it) to get round the rules. UBS and Crédit Suisse have other problems to concern themselves. My neighbors here in Switzerland where I live are blithely indifferent. Switzerland was a poor country in the early 20th Century, a country of emigration, when some of my relatives left. It is now a very middle class one. Whether it will remain a tax haven (negotiated taxation based on spending) for rich foreigners remains to be seen. But there are better havens for flight capital.
ReplyDeleteMore to the point of this thread there is little here to attract US taxpayers. The quality of investment advice available to the less-than-wealthy is abysmal. Secrecy is limited to nonexistent (theft of data by bank employees and their sale to foreign tax and exchange control authorities is notorious; I could cite probable but undisclosed instances of that going back decades).
It will be interesting to see how Switzerland (and other countries) deal with their own citizens who are claimed, perhaps as former green-card holders, by the IRS as tax absconders. Under international law a country is free to treat dual nationals as solely their own citizens and that is what the USA does. For example, the Canada-US DTC excepts such persons from the mutual collection provision. No collection provision has been proposed between the USA and Switzerland. That must come as a relief to Marc Rich, who is now a Spanish national.
Posted by Andrew Grossman