Swiss clinch deal as it seeks to shed tax haven label

July 23, 2009

ZURICH, July 23 (Reuters) – Switzerland’s Finance Ministry said on Thursday that on drafting an agreement with Finland it had brought to 12 the number of tax deals initialled in efforts to be removed from an international “grey list” of tax-havens.

Switzerland is hoping to secure 12 bilateral tax deals by end-2009, which would allow the country to be removed from an OECD “grey list” of states which need to improve tax cooperation to avoid possible sanctions from G20 nations.

“We are very pleased with the progress Switzerland has made, especially if you consider the commitment (to increase tax co-operation)was only made in March,” Jeffrey Owens, head of the OECD’s Centre for Tax Policy and Administration said.

“It is clear that Switzerland is taking this commitment very seriously,” Owens said.

The new double-taxation agreement with Finland has been agreed at diplomatic level, but it and the other tax deals need to be ratified by parliament.

Switzerland, the world’s biggest offshore banking centre, is keen to be removed from the list quickly but its political system means it could take some time before the initialled agreements are actually sealed.

Fearing G20 sanctions, Berne said on March 13 it would weaken strict bank secrecy and adopt international standards set by the Organisation for Economic Cooperation and Development allowing the exchange of tax data with other countries.

Belgium and Luxembourg have recently been removed from the “grey list” after signing 12 deals.

Initialling is the first stage towards a new or revised deal, with signing normally coming three to five months later.

Berne has also said it wants at least the first of the deals approved by parliament to be put to a referendum.

The initialled text is still confidential, and Switzerland’s administrative districts, or cantons, and business associations will now have the opportunity to submit their views, the finance ministry said.

The Federal Council can then authorise the signing of the agreement, which can then be made public. A double-taxation agreement does not come into force until it has been approved by parliament and by the partner state.

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