Top global private banks face tax evasion crackdown
The world’s leading private banks could be facing an international government crackdown on tax evasion, according to a report in the Financial Times.
This week’s admission by UBS that a leading private banker had been detained as a material witness by the US authorities followed German public prosecutors’ efforts to unmask citizens with undeclared accounts in Liechtenstein.
Matters could escalate this month, when European Union finance ministers review arrangements allowing private banking centres, such as Switzerland and Liechtenstein, to retain client confidentiality in return for taxing foreigners’ savings.
Pressure, led by Germany, to tighten the EU’s savings tax directive could remove the loophole enabling income to remain untaxed if held by a company, rather than an individual. The loophole has led many wealthy account holders, assisted by their banks, to move assets into company names.
Such signs of a crackdown have reinforced warnings that the traditional offshore private banking model, in which wealthy individuals hold assets in secret, and often undeclared, accounts in centres such as Switzerland, may struggle to survive.
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