Switzerland is considering a withholding tax on foreign assets and wants to sign treaties with other countries to crack down on untaxed funds stashed at its banks without abandoning banking secrecy.
“We don’t want untaxed money from abroad,” Finance Minister Hans-Rudolf Merz said at a press briefing in the capital Bern. “However, it won’t be easy to tackle the issue.”
Switzerland, which manages an estimated 27 percent of the world’s privately held offshore wealth, agreed last March to cooperate with countries investigating tax evasion to avoid being labeled as uncooperative by the Paris-based Organization for Economic Cooperation and Development.
The Swiss government has since concluded 18 double-taxation agreements that allow administrative assistance according to OECD standards.
Yesterday’s proposals are based on a report the Swiss government presented in December, Merz said. They include a withholding tax on capital income earned by foreign account holders on their Swiss assets, as well as a one-time tax on any undeclared assets themselves.
Bank clients would also be required to declare that they met their tax obligations at home, the December report said.
“There are no measures that would solve the problem of regularizing existing funds and prevent the inflow of new untaxed money at the stroke of a brush,” Merz said.
He rejected European Union demands for an automatic exchange of bank-account information and said Switzerland won’t soften its banking secrecy.
“I always rejected the automatic exchange of information and still do,” Merz said. It “would very much harm Switzerland’s status as a financial center.”
Representatives of the European Union have urged Switzerland to adopt the policy of exchanging information on account holders automatically and not on request, as stipulated by the OECD provisions.