Switzerland Aims For 12 TIEAs By Year-End To Comply With OECD

by Ulrika Lomas, Tax-News.com, Brussels

08 May 2009

In a news conference on May 6, Swiss President and Finance Minister, Hans-Rudolf Merz, confirmed a Cabinet decision to satisfy OECD demands by signing at least 12 tax accords, in which they offer to exchange information in tax evasion matters, by the end of the year. Merz indicated that agreements may be signed, but not fully ratified in this time scale due to legislation required with regard to bank secrecy and the nature of Swiss constitutional procedures, which can involve referenda.

According to Merz, 23 countries have notified Switzerland that they are interested in new accords on double taxation, out of more than 70 members of the OECD, the European Union, or countries that have a special economic importance for Switzerland. Negotiations have already started with the United States, Japan and Poland.

Swiss and US officials have already held discussions in Bern, and a new round of negotiations is scheduled to occur in Washington in June. These could however be impeded by Swiss attempts to persuade the US to defer legal actions with regard to UBS customers while the talks take place. The US authorities are seeking information on 50,000 US customers of UBS suspected of tax fraud, while the Swiss bank regulator has requested the release of information on 255 accounts in spite of the Swiss bank secrecy law.

Switzerland will approach European Union states individually rather than risk delay that could arise from the European Commission obtaining an EU-wide mandate. Merz indicated as an example of EU delay that many of the 27 EU member countries had not yet implemented a bilateral accord concluded with Switzerland in 2004 to combat customs fraud.

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