The Global Forum on Transparency and Information Exchange for Tax Purposes, set up under the auspices of the Paris-based Organisation for Economic Cooperation and Development, on Wednesday welcomed Switzerland’s rapid progress in meeting new norms.
But at the same time the Forum, meeting in Bermuda, noted that recent tax information agreements agreed by Switzerland do not fully comply with the regulations.
“The Global Forum is recommending that we take several measures. The Swiss will examine how to implement those recommendations,” the Swiss government said in a statement.
In 2009, at the height of the global financial crisis sparked by the collapse of US investment bank Lehman Brothers, Switzerland was singled out with several other tax havens for its tradition of bank secrecy and lack of transparency.
Secret flows of money, as well as cheating the taxman, were also seen as destabilising and having contributed to the crisis, sparking calls for radical reform, chiefly involving full transparency and information sharing.
As a result, Switzerland was put on an OECD list of countries failing to meet standards for full disclosure and was required to become more open – which it has since done by negotiating a series of information exchange accords with its partners.
The Global Forum of 101 nations noted that requests for tax information from Switzerland must be made in great detail, with identities established, rendering a cooperative exchange more difficult.
Switzerland has agreed to modify its response to information requests but will have to do more if it is to be cleared and go on to the next evaluation phase in the second half of 2012, the Global Forum said Wednesday.
The Global Forum examined some 35 countries, finding that France, Italy, New Zealand and the United States generally met standards but Paris, Rome and Washington could be quicker in responding to information requests.
The OECD meanwhile announced the coming into force of a new convention on tax evasion which OECD Secretary-General Angel Gurria urged all countries to adopt.
“The updated convention, which incorporates internationally agreed standards for exchange of information in tax matters, is the most comprehensive multilateral instrument available for tax co-operation,” the OECD said in a statement.