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Germany Wants Switzerland 'Blacklisted' In New OECD Offshore Clampdown

by Ulrika Lomas, Tax-News.com, Brussels

23 October 2008


The German government has suggested that Switzerland should be included on any new 'blacklist' of uncooperative offshore jurisdictions in an attempt to reduce cross-border tax evasion by wealthy German citizens and raise the level of transparency in the global financial system.

A strident Peer Steinbrueck, Germany's Finance Minister, made his remarks following Tuesday's conference of OECD leaders in Paris, where the main topic of discussion was the role of offshore financial centres in the international banking crisis.

According to Steinbrueck, Switzerland offers the conditions that invite Germans to evade domestic taxes and is unwilling to cooperate with the German authorities when these cases are being followed up. "Therefore, in my view Switzerland belongs on such a list," he argued.

Switzerland was unable to respond directly to Steinbrueck's remarks because, like Austria, Luxembourg and the United States, it did not attend the meeting. However, the Swiss Finance Ministry responded in a statement that it complies with all rules laid down by the OECD regarding exchange of banking information, and that it has information exchange agreements regarding tax with several countries, including Germany.

However, the OECD confirmed on Tuesday that it is working with more than 80 countries around the world in the area of cross-border finance, supposedly with a view to enabling countries to "fully and fairly enforce their tax laws."

The OECD announced that it is launching the new initiative after concluding in a recent report that "significant restrictions" on access to bank information for tax purposes remain in three OECD countries – Austria, Luxembourg and Switzerland – and in a number of offshore financial centres, including Liechtenstein, Panama and Singapore.

The 30-member multilateral body is also of the view that a number of offshore financial centres have "failed to follow through" in commitments to implement the standards on transparency and the effective exchange of information developed by the OECD’s Global Forum on Taxation.

The 2008 assessment is the third in a series of reports by the OECD’s tax forum reviewing how far the OECD’s standards of transparency and exchange of information are being implemented in 83 member and non-member economies.

A recent OECD report, entitled 'Tax Cooperation: Towards a Level Playing Field - 2008 Assessment' noted that a number of countries have improved the availability of ownership information and access to bank information for tax purposes. However, it observed that only a small number of offshore financial centres have expanded their network of exchange-of-information agreements.

The Isle of Man has been singled out for particular praise by the OECD after having concluded 11 Tax Information Exchange Agreements (TIEAs), including one with the UK last month. However, the OECD says that of the 83 economies under scrutiny by its tax forum, 11 still do not have exchange agreements in place, either in the form of double tax conventions or TIEAs.

The French government, which convened Tuesday's conference, has suggested that a new blacklist of uncooperative jurisdictions be drawn up and released by the middle of 2009.


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