US, Switzerland agree to share tax data

22nd June 2009, Comments 0 comments

The United States and Switzerland announced an agreement Friday to help limit tax evasion.

Washington -- The United States and Switzerland announced an agreement Friday to modify their tax treaty, a move that could help Washington take action against offshore accounts for tax evasion.

US Treasury Secretary Timothy Geithner said the new accord "will increase our ability to enforce our tax laws and will help bring an end to an era of offshore accounts and investments being used for tax evasion."

Officials said the rules would revise the existing US-Switzerland income tax treaty to allow for the exchange of information for income tax purposes "to the full extent permitted by Article 26 of the Organisation for Economic Co-operation and Development Model Income Tax Convention."

The announcement came after intense discussions between the two countries on efforts by Washington to identify Americans with offshore accounts to evade US taxes.

Swiss banking giant UBS admitted guilt to US tax fraud in February and identified some 300 US clients who were suspected of tax fraud by the US authorities.

US officials in a subsequent lawsuit against UBS requested details on 52,000 more UBS clients suspected of tax fraud but the bank refused to provide the information, saying it would violate Swiss bank secrecy laws.

In Bern the Swiss Finance Ministry said the deal, settled on Thursday, called for the exchange of tax data case by case and in response to a concrete and well-founded request from the other party.

The US Treasury said official signing of the protocol is expected in the next few months.

"This administration is committed to reducing offshore tax evasion to help ensure that all US taxpayers are playing by the same rules," Geithner said in a statement.

Switzerland has reached tax agreements with six countries -- the United States, Denmark, Norway, France, Mexico and an unidentified country.

Switzerland hopes by the end of 2009 to ratify about a dozen accords governing double taxation practices in order to conform to standards set by the OECD.

The goal is to secure its removal from an OECD "gray" list of countries considered tax havens.

AFP / Expatica

0 Comments To This Article