The UK’s tax deal with Switzerland is expected to come into force in 2013, following scrutiny by Parliament and after ratification procedures in Switzerland are complete, HM Treasury said.
The UK’s tax deal with Switzerland is expected to come into force in 2013, following scrutiny by Parliament and after ratification procedures in Switzerland are complete, HM Treasury said.
The agreement has been ‘ratified in principle’ by Dave Hartnett, Permanent Secretary for Tax at HMRC and Michael Ambuehl, State Secretary at the Swiss Federal Department of Finance.
► Switzerland agrees to tax British investors’ hidden billions
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Switzerland and Germany reached a similar agreement earlier this month. Swiss banks will make an advance payment of SFr 2 billion to the German tax authorities. The deal ‘will give Berlin income from hitherto undeclared accounts at Swiss banks, while allowing those customers to retain their anonymity’, the Financial Times reported.
This is how Tax Journal has reported developments since negotations with Switzerland began in October 2010:
October 2010: Critics warned that the identity of tax evaders would be protected, after UK and Swiss Governments signed a declaration on the initiation of negotiations on the introduction of a flat rate withholding tax on savings income. ‘After [the withholding tax] has been paid the tax obligation towards the country of domicile will have been fulfilled,’ the Swiss Department of Finance said.
November 2010: HMRC and the Liechtenstein Government signed a second joint declaration concerning the five-year Liechtenstein Disclosure Facility (LDF) for people who have undeclared UK tax liabilities.
December 2010: ‘HMRC is currently working its way through mountains of information from jurisdictions such as Switzerland,’ PwC Director Richard Clarke wrote in Tax Journal. ‘It really is the last-chance saloon for offshore tax evaders,’ he said.
March 2011: Clarke and his PwC colleague Jessica McLellan observed that ’any deal which results in the UK forgiving a large part of potential tax from Swiss bank accounts may be a political time-bomb.’
‘Two taxpayers holding offshore accounts in Switzerland were recently arrested instead of being offered Code of Practice 9 [used in civil investigation of suspected tax fraud], which suggests that HMRC's strategy is already changing,’ James Bullock, Partner at McGrigors, wrote.
May 2011: ‘Britons with billions of pounds hidden in Switzerland will pay tax at 50% under a groundbreaking deal that will legitimise their undeclared assets, according to a source familiar with negotiations between the Swiss and British governments,’ the Financial Times reported.
June 2011: ‘Thousands of British clients of HSBC who stashed money in Switzerland are to have their financial affairs probed by the taxman ... HMRC has obtained the names and account details of 7,000 HSBC customers from a whistleblower … HMRC has discovered the accounts hold assets of about £13 billion,’ the Sunday Times reported, adding that the bank said it ‘does not condone or encourage tax evasion by its clients’. The paper had ‘learnt that HMRC now has a list of 500,000 Britons with offshore bank accounts from an array of sources’.
The OECD said Switzerland had made ‘rapid progress’ to implement a commitment to the internationally agreed standard on exchange of information for tax purposes, but ‘still falls short in a few areas’. Only only ‘a limited number’ of Switzerland’s exchange of information agreements met the standard, according to the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes.
The UK’s tax deal with Switzerland is expected to come into force in 2013, following scrutiny by Parliament and after ratification procedures in Switzerland are complete, HM Treasury said.
The UK’s tax deal with Switzerland is expected to come into force in 2013, following scrutiny by Parliament and after ratification procedures in Switzerland are complete, HM Treasury said.
The agreement has been ‘ratified in principle’ by Dave Hartnett, Permanent Secretary for Tax at HMRC and Michael Ambuehl, State Secretary at the Swiss Federal Department of Finance.
► Switzerland agrees to tax British investors’ hidden billions
|
Switzerland and Germany reached a similar agreement earlier this month. Swiss banks will make an advance payment of SFr 2 billion to the German tax authorities. The deal ‘will give Berlin income from hitherto undeclared accounts at Swiss banks, while allowing those customers to retain their anonymity’, the Financial Times reported.
This is how Tax Journal has reported developments since negotations with Switzerland began in October 2010:
October 2010: Critics warned that the identity of tax evaders would be protected, after UK and Swiss Governments signed a declaration on the initiation of negotiations on the introduction of a flat rate withholding tax on savings income. ‘After [the withholding tax] has been paid the tax obligation towards the country of domicile will have been fulfilled,’ the Swiss Department of Finance said.
November 2010: HMRC and the Liechtenstein Government signed a second joint declaration concerning the five-year Liechtenstein Disclosure Facility (LDF) for people who have undeclared UK tax liabilities.
December 2010: ‘HMRC is currently working its way through mountains of information from jurisdictions such as Switzerland,’ PwC Director Richard Clarke wrote in Tax Journal. ‘It really is the last-chance saloon for offshore tax evaders,’ he said.
March 2011: Clarke and his PwC colleague Jessica McLellan observed that ’any deal which results in the UK forgiving a large part of potential tax from Swiss bank accounts may be a political time-bomb.’
‘Two taxpayers holding offshore accounts in Switzerland were recently arrested instead of being offered Code of Practice 9 [used in civil investigation of suspected tax fraud], which suggests that HMRC's strategy is already changing,’ James Bullock, Partner at McGrigors, wrote.
May 2011: ‘Britons with billions of pounds hidden in Switzerland will pay tax at 50% under a groundbreaking deal that will legitimise their undeclared assets, according to a source familiar with negotiations between the Swiss and British governments,’ the Financial Times reported.
June 2011: ‘Thousands of British clients of HSBC who stashed money in Switzerland are to have their financial affairs probed by the taxman ... HMRC has obtained the names and account details of 7,000 HSBC customers from a whistleblower … HMRC has discovered the accounts hold assets of about £13 billion,’ the Sunday Times reported, adding that the bank said it ‘does not condone or encourage tax evasion by its clients’. The paper had ‘learnt that HMRC now has a list of 500,000 Britons with offshore bank accounts from an array of sources’.
The OECD said Switzerland had made ‘rapid progress’ to implement a commitment to the internationally agreed standard on exchange of information for tax purposes, but ‘still falls short in a few areas’. Only only ‘a limited number’ of Switzerland’s exchange of information agreements met the standard, according to the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes.
