Italian leader rebuffs idea of tax deal with Switzerland

GENEVA, SWITZERLAND – Italy’s new prime minister, Mario Monti, has told the country’s parliament, through his minister for relations with that body, that Italy should not seek a double taxation agreement with Switzerland along the lines of those with Germany and the UK.

But the opposition then accused him of not being open to negotiations with Switzerland, which has expressed its willingness to seek an agreement, and of not going after the CHF14-15 billion such an agreement could bring into the Italian government coffers.

The European Commission has said it is opposed to such agreements, which allow Switzerland to respect its banking secrecy laws and partner governments to collect tax revenues for their citizens holding Swiss bank accounts. The UK and German agreements call for Swiss financial institutions to collect withholding taxes on transactions, money that is paid to the foreign treasuries. Account holders then have the choice of coming forward and announcing their holdings in order to recuperate the tax, or remaining silent and forfeiting the tax.