Swiss Banking isn’t quite so secret anymore. The Swiss Federal Council announced last week that “Switzerland intends to adopt the OECD standard on administrative assistance in tax matters in accordance with Art. 26 of the OECD Model Tax Convention.” This will allow the “exchange of information with other countries in individual cases where a specific and justified request has been made.” Not only that: the Swiss also will “withdraw the corresponding reservation to the OECD Model Tax Convention and to enter into negotiations on revising double taxation agreements.” For all that, “Swiss banking secrecy remains intact” somehow, according the council.
It wasn’t the U.S. made them do it; the OECD reportedly put Switzerland on a bad banking behavior black list that was to be revealed over the weekend at the G20 meeting. A place on that list could’ve earned the Swiss sanctions.
The Swiss Federal Dept. of Finance bravely puts the best possible face on erosion of centuries worth of privacy, noting that bank secrecy “does not protect any form of tax offense.” The FDF tries to minimize the scope of its new cooperation, but the language cannot disguise the fundamental changes in policy: “The decision that the Federal Council made today will be implemented within the framework of bilateral double taxation agreements. The greater scope for exchange of information will only have practical effects when the renegotiated agreements come into force. In addition, adjustments must be made to the agreement with the EU on the taxation of savings income.”
Austria and Luxembourg also came onboard Friday, joining Lichtenstein, Jersey, Guernsey, Andorra, Bermuda and Singapore.