Switzerland wants the U.S. to deliver the same data on bank clients that the alpine nation has already agreed to: that is the goal of ongoing negotiations. Switzerland is demanding equality in tax matters – a new, more confident tone.
Switzerland is negotiating with the U.S. over a mutual exchange of tax data on bank clients, Swiss finance department official Fabrice Filliez says in an interview with the «Financial Times» (behind paywall). This means that Bern is seeking reciprocity from what has until now been a one-way street.
Reciprocity has been a key Swiss demand for years. Until now, data has flown in one direction only: to U.S. officials. A tax program in which roughly 100 Swiss banks took part provided U.S. prosecutors with the mechanics of how Americans used hidden Swiss offshore accounts to dodge taxes.
Since the introduction of FATCA, or the Foreign Account Tax Compliance Act, in 2010, banks in Switzerland and elsewhere have been required to send tax data to U.S. officials. There is no existing agreement for data to be dispatched in the other direction.
The U.S. hasn't signed up for the OECD-brokered automatic exchange of data being rolled our next year – which means that countries after American data must reach a bilateral agreement with the U.S.
Rothschild in Nevada
Switzerland is in the process of doing so and, according to Filliez, hopes to reach a deal by year-end. A reciprocal exchange of information suggests equality, Filliez says in the interview: «When you commit to something you want your partners to commit to something similar.»
This represents a more assertive tack in Bern's negotiating strategy on tax, which Swiss bankers have long been disgruntled over. Many point out that while U.S. officials effectively brought Switzerland to its knees on banking secrecy, they have watched a crop of new offshore havens pop up in their own backyard.
Swiss tax lawyer Peter Cotorceanu wrote a widely-noted article in «Oxford Journals» last year describing how non-Americans can relatively easily avoid U.S. tax laws.
Private banks which boast of their strides in tax transparency have already responded: Rothschild Wealth Management & Trust, for example, has opened an office in Reno, NV for super-rich clients who aren't American.
Reportedly, billions have already flown to the U.S., where states are competing for a share of the offshore business. Washington is «fully aware of the problem and trying to make it better,» according to Filliez. In parallel to the U.S. negotiations, Switzerland is also talking to countries such as India, Israel, and Argentina.
