Swiss Urge US To Withdraw UBS Case

by Ulrika Lomas, Tax-News.com, Brussels

28 April 2009

Switzerland is hopeful that the signing of a new Double Taxation Agreement with the US will result in an end to legal proceedings currently involving the Swiss banking giant UBS.

During a recent sideline meeting conducted at the International Monetary Fund and World Bank gathering in Washington, Switzerland’s President and Finance Minister Hans-Rudolf Merz urged US Treasury Secretary Timothy Geithner to have complaints against UBS withdrawn, in order to secure approval for a new double tax treaty in the Swiss Parliament, and to guarantee a positive outcome in the event of a national referendum.

The US tax authorities are pursuing a civil lawsuit against UBS, and demanding access to information on a further 52,000 accounts held by Americans that it claims may have been used for possible tax evasion.

Indicating that the case has deeply affected both Switzerland and its Swiss bank UBS, Merz warned that if legal proceedings were to continue, that the prospect of reaching a double tax agreement would then very much be jeopardized.

Emphasising the mutual benefit of an agreement for both Switzerland and the US, and referring to the US as a “key partner”, Merz nevertheless remained confident that a new treaty would indeed be negotiated this week.

US Treasury Secretary Timothy Geithner is understood to be considering Switzerland’s request, suggesting that it may yet be possible to salvage a deal.

Swiss and US officials will meet in Bern this week for the first round of talks on the new tax treaty.

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