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BANK

Swiss will have to give up bank secrecy: expert

Switzerland will likely have no choice but to give up its cherished bank secrecy practices amid mounting international pressure to fight tax evasion, a top scholar of banking law said in an interview published on Saturday.

Swiss will have to give up bank secrecy: expert
Photo: Teepi/Flickr

"I doubt that Switzerland can avoid it," Luc Thevenoz, head of Geneva's Centre for Banking an Financial Law, told the Le Temps daily, referring to the automatic exchange of banking data with foreign tax authorities.

In Switzerland, banking secrecy has for decades been seen as an immutable practice aimed at privacy protection, in the same way as medical confidentiality.

Although the Alpine country has recently been cracking down on undeclared funds in a bid to clear its reputation as a tax haven, it has so far stubbornly refused to consider allowing the automatic exchange of banking information.

Thevenoz insisted however in Saturday's interview that the country needed to face the fact that "the situation has changed."

He pointed to Luxembourg's recent about-face on its own bank secrecy policies, deciding to allow the automatic exchange of bank account information with its EU partners from 2015.

An accord Switzerland was recently forced to sign with the United States allowing automatic data exchanges to ensure Swiss banks can still do business there, had also changed the playing field, he said.

And Bern's bilateral agreements to ease banking secrecy for citizens of some countries have "failed to convince," he said, after the German parliament blocked its deal late last year, considering it too easy on tax cheats.

"We have seen that it doesn't take much for Switzerland to be stuck with a negative image and for us to land in the same category as some offshore centres with lesser reputations," Thevenoz cautioned.

"For Switzerland, which has other interests besides its financial sector, this is unbearable," he said.

He warned that if the country dragged its feet before changing course, it risked landing on tax haven blacklists, as happened in 2009.

Thevenoz's comments came a day after the Group of 20 economic powers called for the global adoption of standards for sharing bank account information to fight tax evasion.

"It is in our interest to participate in defining an international standard (for automatic information exchange) instead of having one imposed on us," he said.

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TAX

Switzerland and Italy hope to deliver cross-border worker tax deal ‘by 2021’

Switzerland and Italy have pledged to conclude a long-awaited tax arrangement for cross-border workers by the end of the year.

Switzerland and Italy hope to deliver cross-border worker tax deal ‘by 2021’
Photo: ALESSANDRO CRINARI / POOL / AFP

At a meeting in Rome between Swiss President Simonetta Sommaruga and Italian Prime Minister Giuseppe Conte, the two leaders said progress was being made on a cross-border tax arrangement. 

The agreement, originally negotiated in 2015, has as yet not been signed by either state. 

READ: How Switzerland avoided a coronavirus 'catastrophe' by protecting cross-border workers 

A 1974 agreement between the two countries doesn’t define cross-border worker. 

Sommaruga praised Switzerland’s decision to reject an initiative which would have restricted migration from EU countries and perhaps had impacts on cross-border workers. 

“In last Sunday's referendum, the Swiss people once again said that they want the free movement of people. It is a good thing for our country but it is also a good thing for the whole of Europe,” she said. 

“With neighbouring countries, Switzerland has adopted a regional approach excluding border regions and also cross-border workers from the quarantine regime. 

“I hope we can continue like this.”

While Switzerland rejected the migration limitation initiative, Ticino was one of four of Switzerland’s 26 cantons to vote in favour. 

Conte told reporters he hoped a deal was concluded “as soon as possible” and hoped it would be concluded by 2021. 

Conte hailed Italian cross-border workers as essential to the health system in the southern Swiss canton of Ticino, particularly during the coronavirus pandemic. 

READ: How Switzerland's cross-border workers are growing in number 

In the canton of Ticino, one in five healthcare workers lives over the border in Italy – approximately 4,000 people. Ticino’s population swells from approximately 360,000 people to 440,000 during an average work day due to cross-border workers from Italy.

Unlike with Italy, Switzerland has struck a tax deal for cross-border workers from neighbouring France, which was amended during the coronavirus pandemic. 

 

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