Austria and Switzerland sign deal protecting bank secrecy
April 20th, 2012
April 20th, 2012
Switzerland has just signed a ‘Rubik’ deal with Austria which protects banks secrecy in return for an anonymous tax being returned to Austria. This is similar to the ruinous Rubik deals made with Britain and Germany. This deal, which must be ratified by both countries’ parliaments, makes public a covert Swiss-Austrian alliance to block EU cooperation against tax dodgers and prevent automatic exchange of tax information between European governments.
The European Commission objected to aspects of the Rubik deals which interfere with the European Savings Tax Directive (EUSD) and other EU treaties. The EUSD demands automatic exchange of tax information for certain types of income. Despite covering only a small fraction of types of income and investment, this law led European governments to share information on nearly €13 billion of their citizens income, in 2005 alone, that might not otherwise have been taxed.
Not only is Rubik a beggar thy neighbor policy, it is also immoral, short sighted and self defeating for Switzerland’s counterparties. Without information about the sources there is no way of verifying that the amount of tax anonymously returned is correct or fair. The deal will include a one off anonymous payment on existing deposits, allowing tax evaders to go unpunished. By 2013 when the deal is in force, many tax dodgers will have already moved their assets onto other havens or hidden their identities behind shell companies and trusts.
Other countries are likely to follow Britain, Germany and Austria. Switzerland continues to push the USA to sign this poisonous pact. Greece is still in negotiations for a similar deal, bizarre when you consider that tax dodging has brought the country to its knees.
Equally these deals will not end disputes over hidden assets between Switzerland and countries it has close ties with, demonstrated by a raft of controversies in the last week.
A transparent and multilateral solution will end these disputes and ensure wealthy citizens pay what they owe, therefore parliamentarians in Austria, Switzerland, Greece, the USA, Germany and the UK should oppose these deals.