Switzerland must adopt a position on sharing bank client data with foreign tax authorities more quickly than originally thought and cannot hold back until all other countries have introduced the practice, its finance minister told a Swiss newspaper.
So far, 42 countries have declared an interest in automatically sharing information on taxpayers’ offshore bank and brokerage accounts with foreign tax authorities in line with standards drafted by the Organisation for Economic Cooperation and Development (OECD).
While the Swiss government has indicated a willingness to cooperate with foreign tax authorities, it has said it would take a position on using the standard when it became a global norm.
The completion of the draft agreement by the OECD last week means Switzerland must now speed up this process, said Finance Minister Eveline Widmer-Schlumpf, according to comments in the Neue Zuercher Zeitung, due to be published on Thursday.
“We certainly can’t say that we’re now just going to wait until everyone has introduced automatic information exchange – that would be the wrong path to take,” Widmer-Schlumpf said.
When asked if that meant Switzerland had to move more quickly in relation to automatic information exchange, Widmer-Schlumpf said: “That is certainly the case.”
“Who would have thought a year ago that today we would have the parameters of an OECD standard? Everything has happened a lot faster than we thought it would. That means we have to position ourselves quickly, and in relation to the European Union, as well,” she added.
Once a solution has been declared a global standard, the conditions of Switzerland’s cooperation with particular automatic information exchange signatories can be submitted to parliament in 2015, Widmer-Schlumpf said.
Meanwhile, the rapid approach of a global standard also means the timeframe needed to negotiate with the EU on issues of market access and existing assets has now become tight, Widmer-Schlumpf noted.
Swiss banks are under intense pressure by countries such as the United States and Germany to reveal bank accounts held by their citizens there to avoid taxes.
The need for a common standard to simplify the exchange of financial details has become increasingly pertinent as cash-strapped governments clamp down on tax evasion and countries increasingly share information about taxpayers without a specific request or suspicion of wrongdoing.
Under the OECD’s blueprint published last week, banks would have to report residents’ account balances to their government, which would then make that information available automatically to any other government that had signed the agreement.
Switzerland's long tradition of banking secrecy has allowed rich foreigners to park savings out of sight of their own tax authorities for decades and, for many foreigners, made Swiss bank accounts a byword for dodging taxes.
But foreign governments, led by the United States, are forcing tax havens to reveal their secrets, emboldened by efforts to root out suspected terrorist funding and by a need to boost revenues depleted by the global economic crisis.