Fiscal transparency to put an end to Switzerland’s banking secrecy practices and tax evasion by the wealthy

Switzerland has long been at the center of debates concerning black money stashed in its banks by foreign nationals who take advantage of the country’s strong banking secrecy policies.

Now the Swiss government plans to increase fiscal transparency internationally by sharing private information about clients of the country’s banks through the automatic exchange of information (AEOI), a global standard introduced by the Organization for Economic Cooperation, which will extend to 22 countries for the time being, including Argentina, Brazil, Uruguay and Mexico as well as India and South Africa

According to Switzerland’s Federal Department of Finance, this move is an attempt to put an end to the country’s long-protected banking secrecy policies and practices, and is aimed at preventing wealthy foreigners from hiding their undeclared income and evading taxes back home.

Through AEOI, all participating banks will be required to send client information to national tax authorities, which in the case of foreign clients, will be shared with tax authorities in the clients’ respective countries of residence.

According to a government statement, agreements are expected to be reached by January 2018 and the exchange of bank information will kick in the following year.  “This will contribute to strengthening the competitiveness, the credibility, and integrity of Switzerland’s financial center,”  the statement said.

Switzerland has already made AEOI agreements with 38 other countries, including the EU, Gibraltar, and Australia, and data sharing is expected to start next year.

The Swiss parliament is currently contemplating similar pacts with Canada, Japan, South Korea, Iceland, Norway and the British crown dependencies of Jersey, Guernsey and the Isle of Man.

Source: RT