It’s the case that never seems to go away.
The United States and Switzerland continue to dicker over the proper resolution of the offshore tax haven scandal.
The Swiss may be neutral in matters of war, but it would be a mistake to underestimate their resolve in matters of diplomacy.
Tax News.com reports, an international tax reporting agency, has the latest on the negotiations:
Switzerland is hopeful that the signing of a new Double Taxation Agreement with the US will result in an end to legal proceedings currently involving the Swiss banking giant UBS.
During a recent sideline meeting conducted at the International Monetary Fund and World Bank gathering in Washington, Switzerland’s President and Finance Minister Hans-Rudolf Merz [pictured] urged US Treasury Secretary Timothy Geithner to have complaints against UBS withdrawn, in order to secure approval for a new double tax treaty in the Swiss Parliament, and to guarantee a positive outcome in the event of a national referendum.
The US tax authorities are pursuing a civil lawsuit against UBS, and demanding access to information on a further 52,000 accounts held by Americans that it claims may have been used for possible tax evasion.
Although Merz warned Geithner that a continuation of the lawsuit against UBS would hurt the treaty’s prospects, he expressed confidence that an accord would be reached:
Emphasising the mutual benefit of an agreement for both Switzerland and the US, and referring to the US as a “key partner”, Merz nevertheless remained confident that a new treaty would indeed be negotiated this week.
US Treasury Secretary Timothy Geithner is understood to be considering Switzerland’s request, suggesting that it may yet be possible to salvage a deal.
Swiss and US officials will meet in Bern this week for the first round of talks on the new tax treaty.
Recently UBS agreed to pay the U.S. government $780 million in penalties and restitution to avoid prosecution for helping American taxpayers evade U.S. tax.
But in spite of the settlement, the U.S. has continued to pursue the names of of more than 50,000 American UBS investors.
What does it mean for UBS’ American investors?
If the U.S. agrees to drop the lawsuit, the hunt for the names of American investors will probably cease and many investors will have gotten away with their tax evasion scheme.
On the other hand, if the U.S. does not agree to give up the lawsuit and investors do not come forward under the IRS’s voluntary disclosure and partial amnesty program, the IRS will pursue those non-disclosing investors to the full extent of the law.
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1 response so far ↓
1 Blawg Review #210 | // May 4, 2009 at 1:33 pm
[...] Peter Pappas notes that Switzerland is backing UBS’ resistance to the US’ attempts to uncover Americans hiding money overseas to avoid taxes. Writes Pappas, “The Swiss may be neutral in matters of war, but it would be a mistake to underestimate their resolve in matters of diplomacy.” I am forced to remain neutral here because my older brother (ranked #19) is a UBS broker. [...]
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