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You are here: Home Finance & Business Banking Banking centres arrange tax agreements

25/02/2009Banking centres arrange tax agreements

Switzerland and other tax havens face growing pressure over banking secrecy.

GENEVA- Countries long seen as financial havens are quietly arranging to offer more cooperation on tax reporting as Switzerland faces growing pressure over its banking secrecy, which is alleged to encourage tax cheats.

Malcolm Couch, who is Assessor of Income Tax for the Isle of Man, told AFP, "We've quietly, in the background, without getting much acclaim, got on with working closely with the OECD, concluding lots of tax cooperation agreements."

The Paris-based Organisation for Economic Cooperation and Development is leading an initiative to encourage greater transparency in tax matters.

Couch, who is in charge of the tiny island's direct taxation matters, added that its "regulatory system is completely up to scratch".

All countries offer some degree of banking secrecy, although in some -- such as Switzerland -- client confidentiality is enshrined in law.

AFP PHOTO / Fabrice Coffrini
The border between Switzerland and Liechtenstein is seen above the Rhine river on February 19, 2008 near Vaduz. Switzerland does not fear attacks on its banking secrecy, whereas neighbor Liechtenstein found itself splashed by a giant fiscal fraud scandal gripping Germany, according to financial and banking players questioned on February 23, 2008 by AFP.

Information on clients can be released to authorities only for criminal matters in Switzerland, where tax evasion is not a crime while tax fraud -- which involves the forging of documents -- is.

Earlier in February, Switzerland's biggest bank, UBS, provided data on 250 to 300 clients to the US government. It also admitted to aiding tax fraud in the United States and paid USD 780 million (CHF 906 million) to settle the charges.

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