Wed, Sep 03, 2014 - Page 15 News List

Swiss wrap up payment program for tax dodgers

AFP, GENEVA, Switzerland

Switzerland on Monday said that it had completed a program to pay Britain and Austria hundreds of millions of euros in settlements for past tax dodging by their citizens.

In a statement, the Swiss tax administration said that London had received a total of £469.5 million (US$779 million) and Vienna, 738.3 million euros (US$969.1 million) over the year-long program.

With the financial crisis having put Switzerland under pressure to lift its trademark banking secrecy laws, the country opted to give ground in some areas while defending the overall principle of privacy.

Under bilateral deals with Britain and Austria, Switzerland offered two options to people who failed to declare in their home countries money placed in Swiss banks.

They could either turn themselves in to their homeland’s revenue services, or have their accounts taxed by the Swiss, who then transferred the funds without naming the clients.

It was under the latter system that Switzerland handed over the sums in tranches between July last year and last month.

The completion of the payments means that the British and Austrian clients’ funds are now considered clean.

The total amount of funds regularized in this way now stands at £10.4 billion and 5.9 billion euros.

In addition to the deal on securing back taxes, Switzerland has agreed to collect regular taxes from British, Austrian and other EU account holders, then transfer the money to the individual’s homeland anonymously.

Switzerland, which is not a member of the EU, had also negotiated a deal with Germany to clear past tax dodging, but it was shot down by German lawmakers.

France has refused to make a similar deal with Switzerland, preferring to oblige French tax dodgers with cash in Switzerland to use its own national system.

The deals with Britain and Austria could become redundant from 2017, when Switzerland has pledged to apply rules on the automatic exchange of tax information.

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