Relief for some US bankers in Switzerland as court blocks tax case info disclosure
Switzerland’s highest court has ruled against the transfer of information about their employees and other third parties by Swiss banks to US federal tax investigators, in what is expected to come as a relief to some Switzerland-based bankers, according to reports out of Switzerland.
The Swiss Federal Court ruling, on Wednesday, upheld an earlier decision in a case brought by a Switzerland-resident American expatriate, who had challenged the Swiss Federal Tax Administration’s intention of disclosing data from his Swiss bank account to the US authorities, the English-language edition of the Swiss Broadcasting Corp’s Swissinfo.ch news website reported.
According to the report, the court said general details of third-party individuals weren’t obviously relevant to the case in question, and that the FTA had failed to prove that the information was indispensable for making the case against the tax evader.
For this reason, even if these individuals had been involved in the tax evasion matter in question, their identities should not be requested through administrative assistance channels, the court ruling reportedly said.
The decision is final, as the Federal Court is Switzerland’s top court in such matters. However, the ruling comes as traditional Swiss bank secrecy is being eroded, and against a backdrop of high-profile cases involving the US tax authorities coming after American tax evaders who hid assets in such Swiss banks as UBS, Credit Suisse, Julius Baer and others.
Switzerland is among some 102 countries that have agreed to participate in the OECD’s Common Reporting Standard information exchange scheme. Forty-nine countries agreed to begin the automatic information exchange last year, with another 53, including Switzerland, set to join the effort this year. One of the few major countries not to agree to sign up to the scheme is the US, which says it doesn’t need to as it has its own scheme, the Foreign Account Tax Compliance Act.