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SBA Urges Government To Stand Firm On Banking Secrecy

by Carla Johnson, Investors

12 September 2002

The Swiss Bankers Association has joined the chorus of voices urging the government to stand its ground in the ongoing dispute with the European Union over the taxation of non-resident savings interest.

Speaking after an informal meeting of EU finance ministers last week, Luxembourg's Economy Minister, Henri Grethen announced his government's opposition to the possibility of sanctions proposed by Taxation Commissioner, Frits Bolkestein, a move which was doubtless welcomed by the Swiss government.

However, a further message of support came from the country's bankers association this week. Speaking on behalf of the SBA, spokesman James Nason explained that:

'The Swiss don't see why they should turn their legal system on its head to justify the needs of an internal economic bloc.' He added that: 'An automatic, blanket exchange of information is out of the question.'

In addition to offering to impose a withholding tax on the savings of non-residents, the Swiss government has raised the possibility of foreign bank clients in Switzerland being able to choose between the withholding tax or information exchange with the tax authorities in their country of residence, and the possible extension of a clause contained in the - not yet ratified - double taxation agreement with Germany, which allows for targeted information exchange in cases of tax fraud.

However, no agreement has yet been reached, although bilateral negotiations between the EU and Switzerland began again earlier this month.

A comprehensive report on the future of offshore following the various international initiatives, including the EU's Savings Tax Directive is available in the Tax-News Reports Shop at

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