Switzerland is rushing to sign an additional tax information deal to secure its removal from a tax haven list later on Thursday, when a meeting of the Group of 20 nations starts. A Swiss diplomatic source said the government planned to sign a 12th double-taxation treaty, fulfilling conditions for being be taken off the international tax haven list drafted by the Organisation of Economic Co-operation and Development.
"This is the plan," the source told Reuters. G20 leaders agreed to name and shame offshore centres that did not cooperate on tax evasion in April and threatened them with sanctions. That caused a political embarrassment for Switzerland and other international offshore centres, which swiftly agreed to relax their bank secrecy rules.
The pressure was particularly high on Switzerland, the biggest offshore centre which manages one third of the world's wealth, at a time when banking giant UBS was facing a tax fraud probe in the United States.
The G20 is expected to take stock of progress by offshore centres at its summit on Thursday and Friday in Pittsburgh. Many offshore centres, including European Union members Austria and Luxembourg, have already been taken off the 'grey list' in recent weeks, putting pressure on Swiss authorities to act.
The list comprises countries that have not fully implemented global taxation standards. Signing the new treaty, most likely with Qatar, would allow Switzerland to be removed from it. "With a 12th agreement we should fulfil the OECD criteria," the source said.
An 11th tax treaty was signed with the United States on Wednesday. The Swiss, UBS and the US government settled their tax case last month, with the bank agreeing to turn over 4,450 names of clients with undeclared accounts to authorities.
The OECD already signalled on Wednesday that Switzerland will soon be taken off the grey list. "Signing agreements is only one step in a process. What we will now be looking for is effective implementation by all countries," OECD Secretary General Angel Gurria, attending a G20 summit that starts in Pittsburgh on TThursday, said in a statement. But Switzerland still faces a potential domestic headache as one of the treaties will have to be put to a popular vote in a referendum.
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