News Column

Switzerland, US Agree on Deal to Prevent Tax Evasion

Dec 4, 2012

Switzerland and the United States have agreed to a deal that will make it harder for US citizens to hide untaxed money at Swiss banks, Swiss Finance Minister Eveline Widmer-Schlumpf confirmed Tuesday.

Both countries initialed an agreement based on Washington's Foreign Account Tax Compliance Act, which obliges foreign banks to report accounts of US citizens.

If a client does not agree to such a report to his home country, banks deduct 30 per cent from transfers from the United States, as a tax that goes to the US Internal Revenue Service.

Threatened with lawsuits against Swiss banks that allegedly helped US tax evaders, the Swiss government agreed this year to loosen its banking secrecy rules and has provided more banking data to US tax authorities.

Besides the new agreement, which is expected to come into force in 2014, the government in Bern is trying to end its tax row with Washington by negotiating a comprehensive settlement deal that would also address past flows of untaxed income.

So far, US authorities have investigated 11 Swiss banks and have arrested and charged several managers of Swiss banks.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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