Brussels, 26/10/2010 (Agence Europe) - Swiss diplomats have been highly successful in their attempts in the various EU member states to get round EU automatic exchange of tax information rules in order to protect the confidentiality of bank deposits in Swiss banks by people not living in Switzerland. Switzerland has won agreement in principle with Germany and the United Kingdom on the idea of introducing a discharge tax on funds deposited in Swiss banks by German and British nationals in return for keeping information confidential and therefore ensuring the anonymity of depositors.
Information about the deal with Germany was confirmed on 21 October by the Swiss financial affairs minister, Michael Ambühl, who said that the agreement did not at present involve any definite figures, instead covering the “principles and formulae that are to be drawn up in negotiations”. The total amount deposited is reported to be in the region of €200 billion. Under the agreement, Swiss banks would undertake to levy a 25% tax on future interest paid to the customers in question, which would go to the German government. Swiss banks are offering to calculate and pay to the German tax department 35% of the interest payments over the past ten years by German nationals holding secret Swiss bank accounts.
The agreement might be signed before the end of the month and would allow Switzerland to no longer have to automatically share bank account details with Germany and hence to preserve banking secrecy. The tax would enable Germany to recover around €30 billion of tax income, which is particularly welcome in the current belt-tightening. By doing this, Germany would be stepping back from EU policy, which includes the automatic exchange of bank information.
The idea behind the agreement with the United Kingdom is the same, but how the system would work has not yet been decided and the time periods involved are longer because negotiations are not expected to begin until next year (with a view to signing an agreement later in the year). A statement to this effect has been signed by the British tax issues minister, David Gauke, and the Swiss finance minster, Hans-Rudolf Merz, following talks between the latter and his British counterpart, George Osborne.
The agreement with the UK is reported to involve a deduction at source on interest paid to holders of Swiss bank accounts, which would be paid to the British government. This would enable the British Treasury to recover huge sums at a time when David Cameron's government is using all the means at its disposal to balance the state coffers. It is estimated that British citizens have between £100 billion and £125 billion deposited in Swiss bank accounts. A Treasury spokesperson said that this was a reasonable, pragmatic approach by the Chancellor to recover cash that would otherwise not be collected. In return, it would be made easier for Swiss financial institutions to access the British market.
Sticking points in the negotiators might be whether or not the capital to be taxed at source would include undeclared funds deposited in Switzerland inherited by British tax payers from people who have died; the sharing of more general information about accounts held in Switzerland by British nationals; and whether the information should be provided retroactively. In this connection, Switzerland has already indicated that the sharing of further information would not apply until the deal comes into force and would not be retroactive. (F.G./transl.fl)