Foreigns banks in Switzerland back tax proposal

26th May 2010, Comments 0 comments

Foreigns banks in Switzerland said Wednesday that they would back a final withholding tax on assets held by foreigners, in a bid to help the country shed its image as a money laundering hub.

"We should prevent Switzerland from being a washing machine for undeclared money," said Alfredo Gysi, who heads the Association of Foreign Banks which groups 150 banks that own subsidiaries in Switzerland, such as HSBC, Deutsche Bank and Credit Agricole.

"We are ready to introduce accompanying measures if the bilateral accords take into account a withholding tax," he added during a press conference in Zurich.

Such a withholding tax -- Abgeltungssteuer in German, would be the final tax imposed by authorities, and unlike a retention tax, would not be subject to adjustments.

For Gysi, the future of the Swiss financial centre is dependant on authorities' ability to find a "solution for the fiscal and legal situation of our clients."

Switzerland's neighbours and the world's leading economies have forced the country to offer concessions on banking secrecy over the past year, in an international clampdown on tax evasion.

The government has vowed to find ways to prevent foreigners from hiding undeclared funds in the country's banks.

Banking associations here have since proposed such a withholding tax on assets held by foreigners, in order to fend off calls for an exchange of banking data.

However, the European Union is among the parties opposed to the proposal, as it prefers an automatic exchange of information on suspected tax cheats.

© 2010 AFP

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