Swiss Federal Council Sets Conditions For Tax Assistance

by Ulrika Lomas, Tax-News.com, Brussels

21 December 2009

Determined to hold onto its traditional system of banking secrecy in order to protect the privacy of customers, Switzerland’s Federal Council has, nevertheless, announced its willingness to strengthen cross-border tax cooperation in specific cases, provided that certain conditions are met.

The key conditions specified by the Federal Council include the waiver of the right to an automatic exchange of information; measures designed to improve market access abroad for Swiss financial institutions; and an understanding that undeclared foreign accounts held in Switzerland are to be regularized by the country of residence.

The Federal Council has also put forward the idea of introducing a withholding tax provision in future bilateral agreements, together with, or as an alternative to, the requirement that clients complete a self-declaration form confirming that they have already fulfilled their tax obligations at home.

In a report presented recently by the Federal Finance Department, the Swiss government also outlined four strategic goals for the country, specifically drawn up to safeguard the position of Switzerland as a financial center.

So as to improve market access abroad for Swiss institutions, the Federal Council has emphasized that it is now eager to resume talks with the European Union (EU) regarding the negotiation of a service agreement, or an agreement limited specifically to financial services. Switzerland had suspended such talks with the EU in March 2003.

The implementation of the government’s strategy is to be carried out by an interdepartmental working group, led by the Federal Finance Department. It has also emerged that a new state secretariat responsible for international financial matters is due to be established shortly.

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