EU rules will force changes in Swiss tax regime
A new report written by a Swiss academic says the review of the European Union tax rules will mean a revision of the local tax regime.
Xavier Oberson, professor of law at Geneva University, said in a recent comment for the Geneva Private Bankers Association that Switzerland would be forced to open itself up to a tax investigation, and the relaxed tax rules its citizens enjoy will be lost.
He said: "Questioning the distinction made between tax evasion and tax fraud would lead to a general revision of Switzerland's tax system."
He added that the spotlight has been irreversibly turned on Switzerland since the Liechtenstein affair, which exposed various German public figures with undeclared assets deposited in the tax haven.
He said: "In the long run the question could be raised as to whether some taxes would still be justifiable, leading to increased pressure for them to be modified or even abolished."
Switzerland has so far resisted attempts to involve it in the widening European tax evasion investigation, using a deal with the EU to support its position. It operates under a bilateral agreement whereby the EU imposes a withholding tax rather than exchanging information.
Despite competition from centres in Asia, Switzerland is by far the biggest offshore financial centre in the world. Swiss banks hold Sfr5.3 trillion (€3.4 trillion) in offshore bank accounts, according to data published by the Swiss National Bank.
The fact that a large number of these accounts are held by German nationals is unsettling top officials in Berlin. German Finance Minister Peer Steinbrück is leading calls to extend the scope of the EU savings directive and has asked other European countries to lend their support.
An interim report from the EU commission is due by September 30 this year.
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