It’s hard to believe, but Switzerland is rather pissed off about being named on the OECD’s grey list as a tax haven. The UK’s Daily Telegraph reports:
“President Hans-Rudolf Merz regrets this procedure. The list does not specify the criteria on the basis of which it was drawn up. Switzerland is not a tax haven,” the finance ministry said in a statement late Thursday.
The three-tier list categorising tax havens and financial centres by their degree of cooperation was endorsed by the G20 leaders meeting in London on Thursday.
Switzerland was placed in the middle tier of countries, which have adopted the Organisation of Economic Cooperation and Development’s standards on exchanging tax information but not yet “substantially” implemented them.
If Switzerland feels so comfortable about its own truth, one wonders why at all its government formally decided on March 13 to ease the country’s banking secrecy and fully adopt OECD tax standards – 3 weeks before the G20 meeting. And it was only last week that the Swiss government gave the green light to talks with the United States and Japan to reinforce tax cooperation, while negotiations with some European countries are expected to be endorsed this month. Given its latecoming, the claim that its “actions are louder than words” sound rather a bit hollow. And in hindsight it seems unlikely that the self-deluded Swiss would have ever come to the table if not for the threat of serious economic consequences:
Tax havens that refuse to sign anti-secrecy agreements face expensive sanctions under an unprecedented global effort to catch illegal tax evaders.
Among the sanctions being considered by the G20 are the scrapping of tax treaty arrangements, imposing additional taxes on companies that operate in non-compliant countries, and tougher disclosure requirements for individuals and businesses that use shelters.
An estimated $7 trillion of assets are held offshore and, according to pressure group Tax Justice Network, developed countries lose $180bn a year in evaded taxes.
Unfortunately for Switzerland, they’re not China. It apparantly refused to play the game and it took lengthy diplomacy with China to get the OECD list published because it did not want its dependancies Macau and Hong Kong named; in the end, “they were only referred to in the footnotes as China’s ‘special administrative regions”’. Bad luck for Switzerland.
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- G20 summit agrees tax haven crackdown (accountancyage.com)
- OECD names and shames tax havens (news.bbc.co.uk)
- Switzerland Breaks With Tradition on Tax Evasion (abcnews.go.com)
- Switzerland caves in on tax evasion (guardian.co.uk)
- Bank Secrecy Bites the Dust in Europe (businessweek.com)
- G20 declares door shut on tax havens (guardian.co.uk)
- Switzerland to ease bank secrecy rules (cbc.ca)
- Switzerland to cooperate on tax evasion (telegraph.co.uk)
- Secret’s Out: Swiss Banks Will Come Clean (news.sky.com)