Italian Tax Amnesties Hurting Swiss Banking Sector
by Ulrika Lomas, Tax-News.com, Brussels
03 November 2003

In addition to adjusting to the demands of increasing regulation, heightened scrutiny of its operations and the recent downturn in the world’s financial markets, the Swiss banking sector has been facing an additional threat in the form of Italian tax amnesties, which have sucked many millions of euros out of Switzerland in recent times.

One location which has been hit particularly hard is the Swiss city of Lugano, which has long been the favourite destination for Italians wishing to move money offshore, not least because of its proximity to the prosperous Italian North.

However, since Italian Finance Minister Giulio Tremonti’s two rounds of tax amnesties, billions of euros in Italian assets have been leaving the city’s banks and financial institutions at an alarming rate. According to the Wall Street Journal, bankers claim that as much as 20 billion euros in client assets has flowed out of Lugano and the surrounding canton of Ticino, and they estimate this has resulted in losses of 130 million euros in revenues as a consequence.

Under the first amnesty last year, Italians declared 60 billion euros to the government, 40% of which was not repatriated. As the authorities believe there is between 250 billion euros and 300 billion euros held abroad by Italian nationals, the government resorted to another amnesty this year, the deadline of which was extended twice after disappointing results. By the middle of July, an additional 15 billion euros had been declared, just over half of which was repatriated.

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