After its regular weekly cabinet meeting, the Swiss government said that 'a system of information on an automatic basis isn't a feasible solution for Switzerland'.

Like many other offshore jurisdictions (although only 'offshore' the other side of Lake Geneva) Switzerland has international mutual assistance treaties which permit foreign investigators to pursue fraud and corruption enquiries, but don't extend to tax matters, since tax evasion isn't a criminal offence in the country.

The government statement said the cabinet would consider ways of making Switzerland 'as unattractive as possible' for people trying to escape legitimate EU taxation, and said that it was examining the feasibility of a tax on non-resident savings although its existing system seemed preferable (currently Switzerland charges a withholding tax of 35% on payments of interest on bank accounts, although this rate only applies when there is no double tax treaty in effect with the country to which the money is being remitted - and such treaties exist for almost all major economies, reducing the rate paid, usually to 10% or 15%, with the balance being reimbursed on application to the Swiss authorities).

The effect of the withholding tax rules is that most depositors pay the lower rate of tax, and then because of strict banking secrecy are bound only in honour to report the income to their home tax authority. Presumably, many do not.

The Government also said that it would only join an information-sharing scheme if other big financial centers outside the EU were prepared to do so.