Swiss to discuss taxes with US, Japan

26th March 2009, Comments 0 comments

Switzerland negotiates tax treaties with the US and Japan.

BERN - The Swiss government on Wednesday agreed to talks with the United States and Japan to align dual taxation deals with the two countries with OECD standards on secrecy.

"The finance ministry was given the mandate to negotiate the dual taxation agreements with the United States and Japan," Swiss President and Finance Minister Hans-Rudolf Merz told journalists after a cabinet meeting.

Merz said US Treasury Secretary Timothy Geithner phoned him within hours of the Swiss cabinet's decision earlier in March to ease banking secrecy, to express an interest in talks.

Work was already underway on a new tax treaty with Japan.

Switzerland, Luxembourg, Austria and other havens announced in March they would ease their bank secrecy laws and help foreign authorities find cases of tax evasion, following months of international pressure.

"Today it's about putting it on the rails and getting the process going swiftly," Merz told journalists.

The tax treaty negotiations are meant to exchange customer banking details when a foreign tax authority requests information based on suspicion of evasion.

Merz ruled out broader automatic exchange of information.

Negotiations with individual European Union countries are expected to be examined in April.

Poland, the Netherlands and Denmark also approached Swiss authorities about adapting their dual taxation agreements, Merz revealed.

France recently decided to stall final endorsement of a new tax treaty with Switzerland unless it is adapted as well.

"We agree with this suspension, we are ready to conduct these talks with France," he said, adding that the issue was likely to be examined on 8 April.

Asked about Germany, whose Finance Minister Peer Steinbrueck was a strong critic of Swiss banking secrecy in recent months, Merz said there was "nothing so far."

Switzerland and other financial havens aim to avoid being blacklisted by the Group of 20 economic powers, after the global financial crisis prompted calls for greater openness and an end to tax evasion.

The European Union will watch the tax talks with the United States "with interest", the EU's ambassador in Bern said in a newspaper interview Wednesday.

"The European Union can't be treated differently from the United States," Michael Reiterer told the Tages-Anzeiger daily.

Switzerland charges tax on interest earnings from savings accounts held by residents of the EU in Swiss banks and the revenue is largely paid back to EU member states.

However, the European Commission signalled that it wants to tighten the system.
AFP / Expatica

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