The United States authorities are holding up resolution of a tax dispute with Switzerland by making new demands, according to Swiss Finance Minister Eveline Widmer-Schlumpf.
The minister told Saturday’s Zürcher Regionalzeitungen newspaper, that since the two countries had agreed on an overall approach to a global settlement “new demands are constantly being made that we cannot accept”.
She could not say how long she expected the negotiations to continue. “If Switzerland did as the United States’ wanted, a global solution would be decided tomorrow.” But Bern is holding firm on certain points, and any compromises had to be compatible with Swiss law, she stressed.
The minister said Switzerland was looking for a solution that addressed the situation of the 11 Swiss banks under investigation by the US authorities for allegedly aiding tax evasion, as well as other Swiss banks. As such, “a line needed to be drawn under the past”.
The Swiss government wants to get US tax investigations against the 11 banks – including Credit Suisse and Julius Bär – dropped in exchange for the payment of fines and the transfer of client names. It is also seeking to shield the remainder of its 300 or so banks from US prosecution.
Widmer-Schlumpf did not go into more specifics on which points in particular were holding up the process.
The US wants Swiss banks to provide information on undeclared funds belonging to American citizens in Swiss banks. A global settlement between the two countries would end ad hoc requests by the US.
“Not at any price”
It comprises a double-taxation accord signed by the Swiss and US governments in September 2009. It was revised and ratified by the Swiss parliament in March 2012. It was cleared by the US Senate’s Foreign Relations Committee in July 2011 but still requires ratification by the US Senate.
The lead Swiss negotiator Michael Ambühl, secretary of state for international financial matters, said in an interview published Friday that Switzerland wanted a US settlement to be concluded by the end of the year, “but not at any price”.
Switzerland and the US have been hashing out a new deal on double taxation ever since 2009 when Swiss bank UBS paid $780 million (SFr757 million) to settle criminal charges. Switzerland also agreed to deliver UBS client data to the US without demanding documentation of suspected tax fraud, thus undermining banking secrecy.
Other Swiss banks have since been in the US tax authorities’ sights.
The current US-Swiss tax deal dates back to 1996 and in line with Swiss banking secrecy laws differentiates between tax fraud and tax evasion. Swiss can provide administrative assistance to the US in cases of tax fraud only, but under the new double taxation accord that could also be given in cases of tax evasion (forgetting to declare assets).
As a result of international pressure, Switzerland has signed around 30 double taxation agreements in recent years, in which administrative assistance can also be given in tax evasion cases, according to Organisation for Economic Co-operation and Development standards.