Switzerland Should Lift Savings Tax, Say Bankers
by Ulrika Lomas, Lowtax.net, Brussels
24 June, 2014
Christoph Gloor, the President of the Association of Swiss Private Banks, has called on the Federal Council to review the 35 percent rate of withholding tax levied on foreign clients' bank interest income once automatic exchange of information provisions are in place.
Speaking at the ASPB general assembly in Basel, Gloor said that imposing a tax at source has acted as a "safeguard" measure up to now, to guarantee tax compliance and prevent abuse of the nation's tradition of banking secrecy. Retaining the tax on deposits once the AEI becomes the international standard will result in a serious competitive disadvantage for the Swiss financial center, he said.
Gloor also urged the Federal Council to ensure a level playing field when negotiating agreements for the AEI with key partner states. Switzerland must apply the same rules as other major global financial centers, and follow the "international consensus" in terms of its tax agreement strategy, he said.
Meanwhile, he said the ASPB supports the Federal Council's decision to negotiate automatic information exchange with the European Union on the basis of the revised and extended European Savings Directive. The ASPB also agrees that Switzerland should move to a Model One Intergovernmental Agreement with the US to facilitate implementation of the Foreign Account Tax Compliance Act, as Model One provides for automatic information exchange through a centralized authority, he added, thereby reducing the administrative burden on local banks.
Concluding, Gloor urged the Federal Council to now turn its attention to strengthening Switzerland's international competitiveness and improving market access for Swiss financial institutions. So far, the executive has focused on boosting international tax compliance and strengthening the territory's resistance to future financial crises, he pointed out.
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