Switzerland and EU kick off tax evasion talks

Switzerland and EU kick off tax evasion talks
Photo: European Union External Action
Bern and Brussels began talks on Friday to update a deal under which taxes on savings banked in Switzerland by EU citizens are paid back anonymously to their homelands.

"The aim of the revision is to close the gaps and prevent people from evading the taxation of their interest income by interposing bogus companies or resorting to certain financial instruments," the Swiss international financial department said in a statement.
In December, the Swiss government formally adopted a negotiating mandate for talks on the issue, following a similar move by European Union member states in May.
Both sides have pledged to hold regular rounds of talks during the first six months of this year.
With the financial crisis raising the stakes in the debate over offshore tax havens, Switzerland has opted to give ground in some areas in order to try to defend the increasingly-contested principle of banking secrecy.
Switzerland, which is not a member of the 28-nation EU, is surrounded by the bloc's members and has tight economic ties with them.
In 2005, before the crisis hit, it struck a deal with Brussels under which it taxes the accounts of non-resident EU citizens who have money in the country, and then transfers the cash to the individual's homeland without revealing their names.
The current tax rate is 35 percent — it was raised from the original 20 percent in 2011— with Switzerland keeping a quarter of the sum levied as an administrative fee.
Only interest in the narrowest sense is taxed, but Brussels wants to widen the net to cover dividends from shares and life insurance policies, as well as capital gains from the sale of shares and real estate.
For 2012, Switzerland transferred a total of 461 million francs (384 million euros, $508 million) to EU member states, marking a two percent increase on the 2011 sum.
Germany received the largest single share, at 143 million francs.
Italy followed, receiving 81 million, while France received 71 million and
Spain, 46 million.
The smallest amount went to Lithuania, with 206,000 francs.
EU residents can exit the anonymous savings tax system, provided they declare their Swiss funds to their home countries' revenue services.
In 2012, a total of 61,000 people chose the latter option, up from 47,000 in 2011.

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