Swiss To Sign Model Treaty With US, Japan

by Ulrika Lomas, Tax-News.com, Brussels

30 March 2009

Swiss Finance Minister Hans-Rudolf Merz has underlined Switzerland’s strategy in conforming to OECD’s standards through the signing of double tax agreements, providing for the exchange of information upon request. It is understood that the first two revised treaties will be signed with Japan and the US.

Merz announced that discussions into an OECD model agreement with Japan were well advanced. Merz explained that Switzerland would initially sign treaties with those countries of ‘primary’ importance to the Swiss economy. Japan, as a crucial trade partner, bolstered by the signing of a free trade agreement in February, and already in discussions with Switzerland over the possibility of a double tax agreement, naturally made it ‘top of the pile’, informed Merz.

Merz underlined that Switzerland would also give priority to countries who had expressed an interest on re-negotiating an existing double tax agreement. Addressing the proposed double tax treaty with the United States, Merz announced that: “The United States Finance Minister, Timothy Geithner, rang to announce Washington's interest on March 13, about five hours after the Swiss cabinet announced its plan to ease banking secrecy.” Speaking to a press conference on March 25, Merz announced that negotiations into the possibility of concluding a revised treaty were underway but warned it would not be a rapid process.

Elaborating on Switzerland’s OECD standards adoption plan, Merz underlined that negotiating an agreement with the EU would be a long-winded process, and therefore tackled later, but announced that Switzerland would endeavour to conclude OECD model agreements with Poland, the Netherlands and Denmark in the foreseeable future.

Merz added that negotiations were being dealt with post haste but warned against countries expecting further concessions. Merz emphasized that Switzerland would only offer concessions where the same was offered in return, welcoming particularly better access for Swiss insurance firms in partner countries. The Swiss Finance Minister did, as ever, rule out concessions on the country’s banking secrecy regime, reaffirming that Switzerland would offer assistance in cases with conclusive evidence, not ‘fishing expeditions’.

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