Daily Management Review

End of Secrecy of Swiss Bank accounts as data sharing begins


10/05/2018




End of Secrecy of Swiss Bank accounts as data sharing begins
Switzerland has automatically started to share data of bank account holders in its country with the governments and tax authorities of many countries which officially brings an end to the era of secrecy surrounding the thousands of Swiss bank accounts where mostly wealth individuals and firms from other countries were kept and managed. It is believed that the country such funds managed by banks of the country was the highest in the world.
 
According to a statement issued by the country’s Federal Tax Administration (FTA), in September this year, it had officially exchanged information for the first time about bank accounts according to global standards formulated to identify tax evaders throughout the world
 
However, there would be some areas where the banks will still maintain secrecy. For example, the Swiss authorities would not be allowed to automatically be allowed to know what citizens have in their domestic bank accounts. But the long standing demand by many countries to abolish the trend of stashing away cash brought in from outside of the country – mostly evading the tax regimens in such countries, and being managed by well-paid European professionals.
 
According to the statement FTA, Swiss authorities were supposed to exchange such information about secret bank details with nine countries apart from those of the European Union. The nine countries are Australia, Canada, Guernsey, Iceland, Isle of Man, Japan, Jersey, Norway and South Korea.
 
“Cyprus and Romania are currently excluded as they do not yet meet the international requirements on confidentiality and data security,” the FTA said.
 
The statement further said that exchange of data with Australia and France was delayed “as these states could not yet deliver data to the FTA due to technical reasons”. The agency also said that it was yet to get data from Croatia, Estonia and Poland.
 
Data on millions of accounts was collected by about 7,000 banks, trusts, insurers and other financial institutions that are registered with the FTA and then that data was transferred to the Swiss tax agency. In turn, the information of about two million accounts was sent to partner states by the FTA. No value of the money stashed away in those accounts was given by the agency.
 
The data handed over to other countries includes name of the owner of the accounts, their addresses, country of residence and the tax identification number along with data about the reporting institution, account balance and the capital income. This information would allow tax authorities in the home countries of those account holders to assess whether the account holders had made correct declaration of the details of their financial accounts in foreign countries.
 
Starting next year, 80 partner countries would be included in the annual data exchange if the partner countries can ensure meeting the necessary measures for ensuring data security of the information shared.
 
It has been years that secrecy in Swiss banks has been criticised by many countries and taxation authorities and there was increasing international pressure which had already dented the level of secrecy of the banking accounts. This meant that Swiss bank accounts could no longer be used easily by rich people of other countries to stash away cash for which they have not paid taxes in the country of origin of such cash.
 
(Source:www.reuters.com)






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