Discussions on a possible bilateral double taxation agreement (DTA) were at the top of the agenda at a meeting in Berne between the Italian Foreign Minister, Franco Frattini, and the president of the Swiss Confederation, Micheline Calmy-Rey.
It was recognized that the breakdown of negotiations over the DTA, the refusal by the Italian government to ratify an agreement between Switzerland and the European Union on fraud, and what appears to the Swiss government to be discriminatory investigations adopted against Swiss banks in Italy, all constitute real difficulties in the relationship between the two countries in fiscal matters.
The major obstacle to the completion of a DTA between the two countries, despite the signing of such agreements between Switzerland and other countries which include a provision for the exchange of tax information, appears to be that Switzerland will not agree to the automatic exchange of information about bank clients.
That is the main reason why such countries as Luxembourg, Liechtenstein and Switzerland remain on Italy’s “blacklist” of tax havens, and have been affected, for example, under its new value-added tax disclosure regulations. As was stressed by Calmy-Rey and Frattini, this has caused particular problems as Switzerland and Italy remain very close economic partners.
It was pointed out that Italy is Switzerland's second largest trading partner, with Switzerland being, in turn, Italy's fifth largest trading partner. The volume of bilateral trade in 2009 was EUR23bn (USD30.2bn). Switzerland is also the sixth largest investor in Italy.
A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.aspTags: tax | law | offshore | agreements | banking | offshore banking | banking secrecy | offshore confidentiality | double tax agreement (DTA) | tax compliance | Italy | Switzerland | compliance | regulation | Italy | Switzerland
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