Thursday, 29 March 2012

Swiss Regulator Calls for More Tax Transparency

BERN – Switzerland needs to consider new policies on the international exchange of tax information, if the country wants to maintain its position as a global leader in wealth management.

At its annual press conference, held on March 27th in Bern, the Swiss Financial Market Supervisory Authority (FINMA), stated that the country and national financial institutions needs to review its policies regarding exchanges of international tax information and embrace a greater levels of tax transparency.

According to the director of FINMA Patrick Raaflaub, who led the conference, Switzerland could lose its competitive edge as a destination for wealth management in the future, unless it can shake the negative image placed on the country in recent years following international allegations of tax evasion committed with use of accounts held with Swiss banks.

Throughout 2011 and 2012 Swiss banks have provided greater amounts of client data to tax authorities around the world, however, the FINMA director said that even further “increased access to bank data is unavoidable.”
Patrick Raaflaub conceded that the concepts of bank secrecy are deeply ingrained in Swiss law, but he also went on to say that in today’s business environment Switzerland’s restrictive policies no longer met the international standards for cooperation on tax matters, and added that FINMA has considerable interest in seeing the government pursue more reciprocal exchange agreements.

This entry was posted on Thursday, March 29th, 2012 at 12:06 AM.
Categories: Taxation in Switzerland.

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Tuesday, 27 March 2012

Swiss still draw the rich despite blows

Swiss bankers are on the defensive with their secretive industry under sustained attack for sheltering tax dodgers.

Some cannot travel abroad for fear of arrest in tax investigations. But the fur coats and expensive cars on display around the Paradeplatz square at the heart of Zurich’s financial district — as well as booming house prices — tell a different story: business is good in a city now ranked the world’s costliest.

The currency is up 30 per cent since 2008, despite a cap imposed last year by the central bank, because investors view it as a safe haven in global economic turmoil.

The same factors make the country’s banks attractive despite the gradual erosion of bank secrecy: political stability and neutrality, low government debt and an economy which has been relatively resilient through the financial crisis. Although Swiss banks, especially the country’s biggest UBS, have shared in the pain of the crisis, they have retained an image for solidity, particularly in contrast to their euro zone rivals, bolstered by new capital rules that are the world’s strictest.

The swelling ranks of Chinese and Indian millionaires who have developed a taste for Swiss luxury watches are also drawn by the country’s quality-seal when it comes to banking their new wealth, helping to replace US and European tax exile clients.
Figures published in recent weeks show that six of the biggest Swiss banks together pulled in net new client assets of more than 100 billion Swiss francs ($108.96 billion) in 2011.

“Switzerland PLC remains a hugely popular global epicentre of wealth. Clearly in the global environment of the last 12-24 months people have been looking for safekeeping,” said Sebastian Dovey of wealth management consultancy Scorpio Partnership. “Net new assets might reflect a positive mood from 12 months ago. Will we see a similar strength in 12 months time? I suggest we probably will,” Dovey added.

While Singapore and London are also doing well, Dovey noted Switzerland has defended its position as the biggest centre of offshore wealth. It remains the top choice for investors in Asia even if Singapore might overtake it in a decade.