Era of bank secrecy ends as Switzerland starts sharing account data

Era of bank secrecy ends as Switzerland starts sharing account data

The era of mystery-cloaked Swiss bank accounts has officially come to a close as Switzerland, the world’s biggest centre for managing offshore wealth, began automatically sharing client data with tax authorities in dozens of other countries.

The Federal Tax Administration (FTA) said on Friday it had for the first time exchanged financial account data at the end of September under global standards that are aimed at cracking down on tax cheats.

Bank secrecy still exists in some areas – Swiss authorities cannot automatically see what citizens have in their domestic bank accounts, for example – but gone are the days when well-paid European professionals could stash wealth across the border and beyond the prying eyes of their taxmen.

The initial exchange was supposed to be with European Union countries plus nine other jurisdictions – Australia, Canada, Guernsey, Iceland, Isle of Man, Japan, Jersey, Norway and South Korea.

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 “Cyprus and Romania are currently excluded as they do not yet meet the international requirements on confidentiality and data security,” the FTA said.

Transmission of data to Australia and France was delayed “as these states could not yet deliver data to the FTA due to technical reasons”, it said, adding that it also had not yet received data from Croatia, Estonia and Poland.

About 7,000 banks, trusts, insurers and other financial institutions registered with the FTA collect data on millions of accounts and send them to the Swiss tax agency.

The FTA, in turn, sent information on around two million accounts to partner states.

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It puts no value on the accounts in question.

The information includes the owner’s name, address, country of residence and tax identification number as well as the reporting institution, account balance and capital income.

This lets authorities check whether taxpayers have correctly declared their foreign financial accounts. The annual data swap will expand next year to about 80 partner states, provided they meet requirements on confidentiality and data security.

The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes reviews states’ implementation of the accord.

Under international pressure, Swiss banking secrecy has weakened for years, meaning rich people from around the world can no longer easily use the Alpine republic to hide wealth.

The changes have put Switzerland in fierce competition with faster-growing centres like Hong Kong and Singapore.

Source: tribune.com.pk

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