Swiss seek to stop tax dispute with Italy

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Switzerland forms a task force to resolve a dispute with Italy over taxation.

Geneva -- Switzerland has formed a task force to draft a strategy to divert a dispute with Italy over taxation, Swiss Finance Minister Hans-Rudolf Merz said Wednesday.

"The aim is to avoid an escalation. We cannot and do not want to be at war with Italy. That would be really unwise," Merz told journalists after a cabinet meeting.

Italian police and tax authorities in late October raided 76 branches of Swiss banks operating in Italy to check if the banks respected rules on "communication requirements" of banking operations by their clients.

The move sparked an outcry in Switzerland, particularly in Ticino, the Italian-speaking southern canton bordering Italy.

Ticino politicians even accused Italian tax authorities of surveillance on Swiss soil, while a border town called on residents to detect Italian spies.

"We have indications that Italian tax authorities spy on their citizens on Swiss territory and they carry out checks in the trains," Gabriele Gendotti said in remarks published by Swiss newspaper Neue Luzerner Zeitung.

Merz said in remarks published Sunday that Switzerland was suspending negotiations with Italy on a new dual taxation deal to replace the current one.

"The accord was, on our side, ready to be ratified. But we will now suspend negotiations until further notice," he said.

On Monday, the Italian government challenged Switzerland's claims.

"Contrary to what was said yesterday by the Swiss, the Swiss were not disposed to concluding the accord," Italy's Foreign Ministry said in a statement on Monday.

Italian authorities claimed that a new dual taxation deal "would have led to an outflow of large Swiss reserves."

"It seems therefore coherent that Bern now indicates its wish to suspend the negotiations," it added.

AFP / Expatica

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