SPBA Examines Future Of Private Banking In Switzerland

by Ulrika Lomas, Tax-News.com, Brussels

21 January 2010

President of the Swiss Private Bankers Association (SPBA), Konrad Hummler, has recently unveiled details of the association’s strategy for the Swiss financial center, as defined in its general meeting held last year.

The strategy is centered around four axes, two of which the SPBA considers to embody essential principles, and two of which it deems “negotiable”:

  • The first axis, and the foremost principle underpinning the strategy, is financial privacy, which, the SPBA emphasizes, is a fundamental right of any individual, irrespective of their country of origin. This right does not, however, entitle an individual to neglect domestic tax obligations.
  • The second axis enshrines the principle that, whatever happens in future to the Swiss financial center, neither the upstanding banking employees nor their clients may be criminalized, either at home or abroad.
  • The third axis marks flexibility in the area of taxation, provided that both the first and the second axes are deemed absolute.
  • The final axis stipulates that concessions in the area of taxation may only be granted provided that foreign countries agree to offer Switzerland a service in return.

The SPBA President highlighted the fact that the idea of levying a withholding tax on foreign account holders not only demonstrated Switzerland’s commitment to honoring, as far as possible, an individual’s privacy, but also to acknowledging the legitimate fiscal requirements of other civilized and democratic countries.

Hummler also underlined the fact that a withholding tax is merely a logical extension of a tax levied on interest, which has already been agreed with the European Union (EU).

Defending the idea of levying a withholding tax, Hummler explained that rather than being proposed “too late”, it comes just at the right time, ahead of the proposed revision of the Savings Tax Directive in 2013. The SPBA vehemently rejects the idea of an automatic exchange of information, he stressed.

According to Hummler, a lack of market access abroad is posing significant difficulties for the Swiss financial sector, particularly within the EU. Services are, as a rule, only able to be carried out via subsidiaries, Hummler continued, which consequently has a negative effect on jobs in Switzerland, on net product, and on tax revenue.

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