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Expat tax avoiders in Switzerland forced to come clean
| Published: | 8 Jan at 6 PM |
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A significant rise in the number of expat tax avoiders in Switzerland turning themselves in has taken place since international laws forced Swiss banks to share offshore clients’ details.
For many decades, traditional Swiss banking secrecy shielded the mega-rich from their tax liabilities as well as encouraging the use of Swiss banks for money laundering by criminals and terrorists worldwide. Switzerland signed into the Automatic Exchange of Information Act put forward by the Organisation for Economic Cooperation and Development in 2014, thus agreeing to share offshore clients’ financial information with 100 world countries.
In 2017, Reuters reported over 6,000 taxpayers in Zurich had declared previously unrecorded assets totalling over 104 million Swiss francs, tripling the amount declared in the previous year, itself a record. Authorities are now struggling to handle the huge number of cases, with only 50 per cent dealt with to date. The rush to declare was the result of a 2010 rule allowing the mega-wealthy to make a one-time untaxed asset declaration without facing a fine. Over one billion has been declared so far, and will be taxed in future.
One US expat living in Switzerland and caught up in the morass decided to exercise his rights by taking the FTA authority to court for its efforts to release Swiss bank employees’ details to the US tax investigators. His case was built on the passing on of private financial details to a foreign government, and proved successful as the court ruled the FTA’s argument was not convincing. The decision is the latest in a number of cases brought, mostly due to the US tax authority’s habit of taking Swiss banks to court in order to have them reveal tax evaders’ details.
For many decades, traditional Swiss banking secrecy shielded the mega-rich from their tax liabilities as well as encouraging the use of Swiss banks for money laundering by criminals and terrorists worldwide. Switzerland signed into the Automatic Exchange of Information Act put forward by the Organisation for Economic Cooperation and Development in 2014, thus agreeing to share offshore clients’ financial information with 100 world countries.
In 2017, Reuters reported over 6,000 taxpayers in Zurich had declared previously unrecorded assets totalling over 104 million Swiss francs, tripling the amount declared in the previous year, itself a record. Authorities are now struggling to handle the huge number of cases, with only 50 per cent dealt with to date. The rush to declare was the result of a 2010 rule allowing the mega-wealthy to make a one-time untaxed asset declaration without facing a fine. Over one billion has been declared so far, and will be taxed in future.
One US expat living in Switzerland and caught up in the morass decided to exercise his rights by taking the FTA authority to court for its efforts to release Swiss bank employees’ details to the US tax investigators. His case was built on the passing on of private financial details to a foreign government, and proved successful as the court ruled the FTA’s argument was not convincing. The decision is the latest in a number of cases brought, mostly due to the US tax authority’s habit of taking Swiss banks to court in order to have them reveal tax evaders’ details.
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