- Title: SWITZERLAND: Swiss Bankers President says bad tax-systems encourage tax dodging
- Date: 27th February 2008
- Summary: ZURICH, SWITZERLAND (JANUARY 21, 1998) (REUTERS) VARIOUS OF BANK WORKER OPENING BOX A BANK STRONG ROOM
- Embargoed: 13th March 2008 12:00
- Keywords:
- Location: Switzerland
- Country: Switzerland
- Topics: Crime / Law Enforcement,Finance
- Reuters ID: LVA4KOPWT5ZZFVTIOW4KO7NQYHE3
- Story Text: The President of Swiss private bankers says tax-systems encourage tax dodging, not their secrecy rules.
According to the president of Swiss private bankers, Michel Derobert, it is badly thought out tax systems which encourage tax dodgers, not the secrecy rules at Swiss banks.
"I think the Swiss banking secrecy rules actually protect clients' confidentiality, I think that what might encourage tax evasion is rather badly thought out systems, which lead people to evade their government regulations or the tax system they are under", he told Reuters in Geneva on Tuesday (February 26).
His statement follows one of Germany's biggest tax-evasion investigations. German prosecutors leading the tax-probe said they had widened their investigation to a second bank in Liechtenstein as momentum to crack down on tax dodging grows.
Investigators have so far searched the properties of about 150 suspected tax dodgers in a nation-wide trawl to prove that up to 1,000 millionaires hid their money in Liechtenstein.
So far, the focus of the probe has been on LGT, a bank owned by Liechtenstein's royal family, a source with direct knowledge of the situation said. Germany has said it paid an informant for bank details of suspected tax evaders. LGT has said only that secret client information was stolen.
Tax evasion or the failure to report earned income is not considered a crime in Switzerland, although tax fraud - falsifying documents to avoid taxes - is. Swiss laws impose a withholding tax on interest earned on undeclared accounts held by Europeans as a way to discourage tax dodgers.
Switzerland's record of co-operating with other countries makes a scandal of large proportions unlikely, but some fear Germany's assault on Liechtenstein is a proxy war and the focus may next shift to Switzerland's huge banking sector.
"There are cooperation agreements with Germany, we have a convention on double taxation, we have agreements on taxation of savings, and we have an international agreement on mutual cooperation in penal matters, so if it is any of these cases, then Switzerland obviously co-operates with Germany. If it is not one of these cases, and it very possibly might be so, then we are in a situation where Switzerland can't co-operate. But for the moment, these are just assumptions," Derobert said.
But the country's fabled banking secrecy has been rolled back in the last 10 years, and Switzerland has signed bilateral agreements with dozens of states to open the books at its banks in the worst cases of tax evasion.
Switzerland is the world's largest destination for foreign wealth, with foreigners holding some $2.9 trillion worth of assets in its banks, dwarfing Liechtenstein, and making it an obvious target for tax inspectors. - Copyright Holder: REUTERS
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