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TAX FRAUD

Heiress appeals against tax fraud sentence

The Switzerland-based heiress to the fortune of French couturier Nina Ricci on Thursday launched an appeal to avoid jail time for tax fraud, in one of the toughest sentences of its kind in French fiscal history.

Heiress appeals against tax fraud sentence
Arlette Ricci is heiress to the Nina Ricci fashion empire. Photo: Loic Venance/AFP

Arlette Ricci, 75, was handed a one-year prison term and a million-euro fine in April 2015 for allegedly hiding 18.7 million euros ($19.8 million) from the taxman for more than two decades.
   
Proceedings at a Paris appeal court on Thursday focused on minor questions of law filed by Ricci's lawyers, and the defendant herself was absent.
   
Ricci stayed “at home in Switzerland for health reasons,” her attorney told AFP, saying it was “unknown at this point” whether she would be able to attend in the future.
   
The Nina Ricci fashion house, founded in 1932 in Paris, is known for its luxury perfumes — especially the floral classic L'Air du Temps — and its classic, slender lines.
   
The case against Arlette Ricci began after revelations that the Swiss private banking arm of British giant HSBC had helped clients hide billions from the taxman, in what became known as the SwissLeaks scandal.
   
The authorities are demanding Ricci pay back some 10.5 million euros in unpaid taxes, penalties and fines.
   
They also confiscated properties in Paris and Corsica, estimated to be worth around four million euros.
   
Ricci was given a two-year suspended sentence on top of her jail term, but she would only have to serve this if she re-offends.
   
The sentencing was considered exceptionally tough in France, where tax fraud typically is punished by fines and recovery of claimed sums, but hardly ever by jail.
   
But the court said the heiress's actions had posed “an exceptional threat to public order” and that she had disguised her true wealth “for more than 20 years with particular determination.”
   
The appeal is expected to run until December 14th.

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MONEY

Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?

When it comes to borrowing money from a Swiss bank, nationality may play a role in some cases, but not in others. This is what you should know about this process.

Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?
Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site comparis.ch 

Holders of other, temporary or conditional permits are not accepted.

READ MORE: ‘A feeling of belonging’: What it’s like to become Swiss

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the  Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.

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