💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

UPDATE 3-Swiss mulls more tax cooperation despite UBS unease

Published 03/06/2009, 01:46 PM
UBSN
-
FLG
-

* Switzerland uneasy at U.S. pressure on UBS over taxes

* More U.S.-Swiss tax cooperation eyed to shield bank jobs

* Swiss finance ministry says bank secrecy remains secure

* Task force to report in two weeks with reform proposals

(Recasts with Swiss foreign minister comments)

By Katie Reid and Stephanie Nebehay

BERNE/GENEVA, March 6 (Reuters) - Switzerland is considering wider cooperation with U.S. tax authorities despite its unease about the pressure exerted on its major bank UBS , Foreign Minister Micheline Calmy-Rey said on Friday.

Speaking after a meeting with U.S. Secretary of State Hillary Clinton, Calmy-Rey said a political resolution of the tax dispute was needed to avoid more job losses in Switzerland as well as the United States, where she said UBS has 30,000 staff, mainly in New York.

"It is in our common interest to avoid all additional escalation," she told a news conference. "The difficulties of UBS could weaken the whole international financial system."

Switzerland has come under fire after allowing UBS to disclose the identity of about 300 of its U.S. clients to avert criminal charges that Swiss regulators said would have put its existence at risk and hurt the economy. [ID:nL5912799]

Swiss banks are forbidden by law to divulge information on clients unless it is suspected that a Swiss criminal law has been broken. Under Swiss law, tax fraud is a criminal offense, but tax evasion is not, although it can result in fines.

Earlier on Friday, the Swiss finance ministry issued a statement saying that while it "resolutely rejected" criticism of Switzerland's laws, it would improve cooperation with other countries about tax offenses and the taxation of savings income.

Calmy-Rey said Switzerland was uneasy about the pressure heaped on UBS, which amounted to indirect pressure on Swiss tax authorities to release information on accounts beyond what is currently allowed under Swiss law. But she said the country was considering greater forthrightness on the matter.

"We are ready to examine to widen the scope of mutual assistance in tax matters and improve our international cooperation on these questions," she told reporters in Geneva.

There was no immediate U.S. comment on the bilateral talks, which preceded a meeting between Clinton and Russian Foreign Minister Sergei Lavrov.

Switzerland is the world's biggest offshore financial centre, managing nearly one-third of an estimated $7 trillion in offshore wealth. Bankers have warned that the financial sector would shrink by as much as half without bank secrecy.

In its statement released in Berne, the finance ministry said Switzerland's cherished banking secrecy would survive. "The government wants to improve the cooperation with other countries in the field of tax offences, however," it said.

In particular, the government is prepared to enter into dialogue with third countries on the taxation of savings income, but "resolutely rejected" criticism of Switzerland by other countries, according to the finance ministry.

"Switzerland is not a tax haven. It has an efficiently-functioning tax system and imposes normal taxes while striving to maintain competitive rates," it said.

France and Germany, under increased fiscal pressure due to the world's economic crisis, have proposed new steps against non-cooperative tax centres and are calling for new criteria to determine whether Switzerland should be added to the list.

A task force struck by the Swiss government will produce an initial report about how Switzerland should proceed with its long-cherished bank secrecy rules in about two weeks, Finance Minister Hans-Rudolf Merz said.

Merz will meet the finance ministers of both Austria and Luxembourg, which also have bank secrecy, on Sunday to discuss the international pressure each country is facing and how to avoid being placed on a blacklist of tax havens. (Writing by Laura MacInnis)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.