Offshore centres strive to avoid G20 sanctions

News - Tax

Monday, 28 September 2009 14:59

Switzerland is desperate to sign an additional tax information deal in an effort to secure its removal from a tax haven list before 1 October, when the Group 20 summit starts. A Swiss diplomatic source indicates the government plans to sign a 12th double-taxation treaty, satisfying conditions to be taken off the international tax haven list drafted by the Organisation of Economic Cooperation and Development (OECD).

In April the leaders of the G20 nations had agreed to name and shame offshore centres that did not cooperate on tax evasion and threatened them with sanctions.

This caused considerable political embarrassment for Switzerland and other international offshore centres. Many swiftly agreed to relax their bank secrecy rules.

The pressure was especially intense on Switzerland, as the country is one of the largest offshore centres which manages approximately one third of the world’s wealth. The banking giant UBS is currently facing a tax fraud probe in the United States.

The G20 is expected to assess progress by the various offshore centres at its summit on Thursday and Friday in Pittsburgh.

Offshore centres such as Austria and Luxembourg have already been taken off the ‘grey list’ in recent weeks, exerting further pressure on the Swiss authorities to act.

The list consists of countries that have not fully implemented global taxation standards. By signing the new treaty Switzerland anticipates removal from it.
An 11th tax treaty was signed with the United States on 23 September.