Switzerland looks into the future

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The Swiss Private Banker’s Association has looked at the consequences of making tax evasion a criminal offence in Switzerland (where it does not have that status at present) and has found that after asking someone they call a highly regarded expert on the subject – Professor Xavier Oberson, of Geneva University that the change:

would lead to an overall revision of Switzerland’s tax system.

As is noted in the paper, putting tax evasion and tax fraud on an equal footing would not only give European tax authorities direct access to the Swiss banking data of their nationals, but also require Swiss authorities to provide immediate administrative assistance to their EU counterparts upon request.

So that would be the end of EU STD withholding for Switzerland for a start. And all it’s double tax agreements would have to be altered. And then it would begin to look like an open economy.

You might think the answer to this is ‘it will never happen’. I suspect the current situation of Martin Liechti, a senior executive with the private banking division of major Swiss bank UBS, currently barred from leaving the USA because the American authorities are investigating his employer for allegedly helping clients to evade taxes might cause some of those bankers to reappraise how far this point can be pushed.

Of course there are those, like Konrad Hummler, a partner in Wegelin & Co., for whom, as is noted in Der Spiegel:

German tax evasion is a legitimate defense by citizens attempting to “partially escape the current grasp of the administrators of a disastrous social welfare state and its fiscal policies.”

“Swiss-style saving outside the system” is something to which not only the wealthy, but also productive small and mid-sized businesses are entitled. “These people must be protected,” he says.

But to all but the maverick it is clear that this is an act little short of war on the democratic choices made by another state, and that it is wholly unsustainable.

There will be those who will argue long and hard in Switzerland for retaining its corrupt ways, but it’s more likely many are now seeing the reality of their future, and are rapidly reconciling themselves to a world in which surviving of the wages of fraud looks like a cosy little number whose days were always going to be numbered.