The 2012/04/17 at 05:40
When the United Kingdom signed, last autumn, a tax agreement with Switzerland to preserve bank secrecy, it drew criticism from the European Union. This time, the decision of Germany, then Austria, to follow on the same path, has provoked the irritation of the European Commission that is very attached to the idea of applying the principle of the automatic exchange of tax information between countries to all savings. Drafted according to the model of the pact signed a few months ago with London, the agreement signed by Berlin, and that signed by Vienna, envisage that Swiss banks will collect tax on gains on assets deposited by German and Austrian nationals and transfer this income to their respective tax offices via their Swiss counterpart. In exchange, German and Austrian tax authorities will not demand the names of taxpayers who have invested capital in Switzerland without declaring their assets to their home countries.
The British, German and Austrian agreements nevertheless differ in the rate of tax applicable. Depending on the length of the banking relationship and the sum in question, the one-off sum to be paid to straighten out past debts is between 15% and 38% in Austria, compared with between 21% and 41% in the other two States. A single rate of 25% has been set by Vienna for the taxation of future capital yields. This rate corresponds with the Austrian tax rate for capital yields. This type of arrangement has sparked off an increasing number of criticisms in Europe. “Member States should refrain from negotiating (…) agreements with Switzerland, or any other third state, insofar as any aspects regulated at EU level might be touched upon,” declared the European Commissioner in charge of Security issues, Algirdas Semeta, in a letter sent to the Danish Presidency of the EU Council, with copies sent to the 27 Ministers of Finance of the Member States.
This point of view is shared by François d’Aubert, Chairman of the Global Forum on Transparency and Exchange of Information, in charge of fighting tax fraud under the aegis of the OECD. “This agreement is a tax amnesty in disguise. There is no guarantee on the real tax base for the withheld tax.” Yet these arguments are not adequate for preventing other European governments from forming pacts with Switzerland. At a time when these governments are seeking to boost their finances in all sorts of ways, this type of agreement proves to be extremely lucrative. This is why Austria hastened to settle the agreement as the government is already banking on the resulting manna of one billion euros to balance its 2016 budget. According to Swiss Minister of Finance Eveline Widmer-Schlumpf, there is no doubt that France and Italy, officially hostile to any negotiation, will study the evolution of the situation between Berne and Berlin before embarking on the same path.