Swiss considering ‘foreigner tax pledge’

November 16, 2009

Swiss banks are considering asking some foreign clients to sign a pledge declaring they aren't breaking tax laws at home.

Swiss Bank, Zurich

The chairman of the Swiss Bankers Association, Patrick Odier, told the Swiss weekly newspaper NZZ am Sonntag (hat tip to Taiwan News) that the industry group is examining ways to pre-empt demands by other countries for an automatic exchange of client information.

One option would be to make customers from nations that have a tax agreement with Switzerland sign a written declaration that they comply with their home country's tax laws.

That Swiss bankers are even considering any accommodations to other countries when it comes to their banking rules is pretty amazing. It just goes to show how effective the global effort has been over the last year to reduce tax evasion by those hiding money in offshore (aka foreign) accounts.

Financial institutions in Switzerland and its Alpine neighbors have long been favorites of the world's wealthy, due in large part to the countries' traditions of extreme client privacy.

But earlier this year, Switzerland finally agreed to turn over to United State investigators some account data — what the IRS referred to as its most-wanted suspected tax evaders — so that U.S. prosecutors might be able to make their cases and collect unpaid taxes from the account owners.

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