Swiss banks finally pull back curtain
ZURICH: The era of mystery-cloaked numbered bank accounts has officially come to a close in Switzerland.
The world’s biggest centre for managing offshore wealth has begun automatically sharing client data with tax authorities in dozens of other countries.
The Federal Tax Administration (FTA) said last Friday that for the first time it had exchanged financial account data at the end of September under global standards that aim to crack down on tax cheats.
Bank secrecy still exists in some areas — Swiss authorities cannot automatically see what citizens have in their domestic bank accounts, for example — but gone are the days when well-paid European professionals could stash wealth across the border and beyond the prying eyes of their tax man.
The initial exchange of information was supposed to be with European Union countries plus nine other jurisdictions: Australia, Canada, Guernsey, Iceland, Isle of Man, Japan, Jersey, Norway and South Korea.
“Cyprus and Romania are currently excluded as they do not yet meet the international requirements on confidentiality and data security,” the FTA said in a statement last week.
Transmission of data to Australia and France was delayed, “as these states could not yet deliver data to the FTA due to technical reasons”, the FTA said, adding that it also had yet to receive data from Croatia, Estonia and Poland.
About 7,000 banks, trusts, insurers and other financial institutions registered with the FTA to collect data on millions of accounts and send them to the Swiss tax agency.
The FTA in turn sent information on around 2 million accounts to partner states. It put no value on the accounts in question.
The information includes the owner’s name, address, country of residence and tax identification number, as well as the reporting institution, account balance and capital income. This allows authorities to check whether taxpayers have correctly declared their foreign financial accounts.
The annual data swap will be expanded next year to about 80 partner states, provided they meet requirements on confidentiality and data security. The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes reviews states’ implementation of the accord.
Under international pressure, Swiss banking secrecy has been weakening for years, meaning rich people from around the world can no longer easily use the Alpine republic to hide wealth.
The changes have put Switzerland in fierce competition for the business of the wealthy with faster-growing financial centres such as Hong Kong and Singapore.