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Greek-Swiss Tax Talks Near Conclusion

by Ulrika Lomas, Tax-News.com, Brussels

06 September 2012


Determined to claw back tax revenues from undeclared Greek money held in Switzerland, Athens is nearing the conclusion of negotiations on a bilateral tax agreement with the Swiss government, with talks due to conclude shortly, according to the Greek finance ministry.

Greece’s Deputy Finance Minister Giorgos Mavraganis has begun the last round of talks in Bern and the deal is expected to be signed by the end of September.

Based on a model akin to similar tax accords recently negotiated by Switzerland with other states, notably Germany and Austria, the bilateral tax deal with Athens will enable Greek residents with deposits held in Swiss banks to either maintain their client anonymity by paying a withholding tax of up to 30% or to regularize their accounts directly with the Greek tax authorities.

The precise amount of money held by Greek residents in Switzerland is unknown. However, according to calculations from Global Financial Integrity, an estimated USD261bn in undeclared money from the underground economy was transferred abroad from Greece between 2003 and 2011.

New Greek Finance Minister Yannis Stournaras last month called for a large-scale crack-down on tax evasion in Greece, and outlined urgent measures to be taken as soon as possible.

Stournaras proposes in particular to enact tougher legislation to enable the faster collection of unpaid fines, to carry out an urgent review and acceleration of existing back tax cases, as well as further extensive checks to track down tax evaders. According to Greece's international creditors, tax evaders are said to owe USD70bn to the Greek government.

However, Stournaras said that the most urgent thing for the government was to take active steps to collect existing fines, especially as raising revenue is a major problem for the Greek government. The Tax Offices and Financial Crimes Squad (SDOE) said it would grant up to 36 instalments spread over three years for tax evaders to ensure effective collection of taxes and fines.

According to the Troika (EC/ECB/IMF), Greece is likely to miss its tax collection targets this year because a crackdown on tax evasion was less effective than initially anticipated.

TAGS: compliance | Finance | tax | investment | tax compliance | tax avoidance | law | banking | offshore | agreements | offshore banking | banking secrecy | withholding tax | Greece | Switzerland

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