Anything but compliant

Posted on

It has been reported that:

Finance Minister Hans-Rudolf Merz says there is no rush to negotiate a double taxation agreement with Germany in the wake of Switzerland relaxing its banking secrecy.

In an interview with the NZZ am Sonntag newspaper, Merz said: "I am in no hurry."

Switzerland has, of course, said it will adopt international standards for tax transparency and cooperation in 12 new treaties it has been called on to sign by the end of the year.

But rumour has treated me that at least one Caribbean island is seeking to sign twelve such agreements exclusively with locations like the Faroe Islands and Greenland so that they have no impact at all.

It is slightly galling to have to say so soon after the event that I was right to suggest it was absurd to suggest that 12 such treaties indicated international compliance, but that I have to do. It very clearly does not. It could never have done so.

After all, 12 was suggested to be appropriate at the G20.

There was no requirement the G8 be included in the 12.

There are 27 states in Europe.

There are 200 odd jurisdictions in the world.

Where the heck did 12 come from? It was always an opportunity for the abusers to claim compliance when the truth was very obviously otherwise.

And so it is proving to be.

 

Merz repeated Switzerland was working urgently to secure the agreements.

In the case of the negotiations with the United States, Merz remained cautious about whether the Swiss would get a US lawsuit against the UBS banking group dropped in return for a treaty.

"I don't know if the deal succeeds," he said. But he added that US finance minster Tim Geithner had understood the US had also to make concessions.

The US Internal Revenue Service is seeking to force UBS to reveal the identities of 52,000 Americans suspected of using accounts at the bank to hide about $14.8 billion (SFr16 billion) of assets and evade US taxes