Switzerland and Britain signed an agreement on Wednesday (24 August) to tax money held by British residents in secret Swiss bank accounts. A similar deal with Germany was reached on 10 August.
Yesterday (25 August), Swiss officials confirmed that Bern had started informal talks with other countries to sign similar tax accords, including Greece.
Banking secrecy has been enshrined in Swiss law since the 1930s. The bilateral treaties with Germany and the UK will allow clients to retain their secrecy, but at a price, and some may choose to move to other, offshore destinations.
The deals represent another step in Switzerland's efforts to clean up its image, amid pressure from American prosecutors and European countries who have been willing to pay for lists of client names stolen by bank employees.
"This move guarantees judicial security and will contribute to reinforcing the long-term competitiveness and reputation of the Swiss finance market," said Swiss Finance Minister Eveline Widmer-Schlumpf.
The British agreement could raise up to £5 billion (€5.6 billion) in withholding tax by 2013. This includes a one-off levy of 19-34% and 48% on future income.
As far as Germany is concerned, the Swiss banks will levy a withholding tax of 26% on income earned on assets belonging to German customers. This rate is roughly equivalent to the current rate of tax charged on such income in Germany.
Germany had become increasingly vocal in recent years in its claims that billions of undeclared German assets remained hidden in Swiss banks. Industry estimates put the figure at SFr200 billion (€191 billion).
"Overall, my assessment of the tax agreements is positive," said Patrick Odier, chairman of the Swiss Bankers Association (SBA), in a statement. "They mark important milestones for the Swiss financial centre. As a banker, I am especially grateful that clients have been offered a fair solution for regularising their assets."
Swiss banks support further treaties with the US, Italy and France, he said.
The SBA added that a predicted "mid-three-digit million"-franc charge that banks will incur to implement the deal is a small price to pay for avoiding the obligation to hand over the details of suspicious clients to other countries on demand.
According to the SBA, implementing the government's tax accord with Germany alone may cost lenders around 500 million Swiss francs (€437.3 million).
Once the deals have been ratified by legislatures, German and British clients will pay a one-off retroactive lump sum on their capital, as well as an annual tax on capital gains and dividend payments, rather than just on interest income.
The new treaties will be much broader than existing accords with the European Union, in force since 2005, which charge a withholding tax on interest income on savings, which is then returned anonymously to the home country.
In Britain, analysts have partly blamed tax evasion for the chronic sovereign debt problems experienced in Greece, Ireland, Portugal and Italy. Indebted Greece is also edging closer to a deal with Switzerland similar to those of Britain and Germany.
Greek Finance Minister Evangelos Venizelos said earlier this year that Greece now wants to negotiate a withholding tax with Switzerland. Greek Prime Minister George Papandreou believes many of the billions that have been withheld from the Greek taxman are lying in Swiss vaults.
However, EU officials have raised concerns that such bilateral deals could be in breach of an agreement being negotiated between Bern and Brussels, which demands automatic information exchange. Reportedly, such a deal would place far more demands on Switzerland than the bilateral treaties signed with Germany and the UK.
A spokeswoman for EU Commissioner Algirdas Šemeta, who is in charge of tax and customs union issues, declined to comment on whether the German and British deals were at odds with the EU approach until the full texts of the agreements had been made available.
She did hint that the current EU-Swiss savings directive could be re-assessed if it were not "equivalent" to the German and British accords.
Daniela Vincenti-Mitchener
