Bern, Switzerland (GenevaLunch) – Switzerland’s agreement with the USA to hand over the names of 4,450 US clients accused of tax fraud, with accounts in Swiss bank UBS, is in danger of unravelling. A Swiss court has ruled that simply not filing an American W-9 form does not constitute “tax fraud and the like”. The Federal Administrative Tribunal, one of the country’s high courts, has asked the Federal Tax Administration to review 25 similar cases, in a decision made public 22 January. An infraction or crime as defined in the annex to the August 2009 agreement cannot take precedence over the 1996 tax treaty, the court has found.
The decision cannot be appealed and may affect up to 4,200 of the clients who are on the list to be handed over to the IRS, the US tax authority.
The court is coming in for heavy criticism by legal experts. Thomas Cottier, a professor of law at the University of Bern is quoted by Swiss-German newspaper NZZ as saying that the ruling seemed to have been drafted without taking the Switzerland-USA agreement into consideration.
The Swiss government is scrambling for a way to save the situation, reports NZZ. Four options are being weighed, it says:
- Bring forward the date at which the newly signed double taxation treaty between Switzerland and the USA comes into force. The treaty allows lesser tax infractions in requests for judicial assistance.
- Parliament could pass the August 2009agreement into law, thus giving it a similar status to the existing 1996 tax agreement. This would have to be reciprocated by the US Congress, but it may not be applied retroactively to the case under consideration.
- A new agreement with the USA could be negotiated.
- The Swiss government could invoke emergency measures.
The court based its ruling on the 1996 tax treaty with the USA, while also noting that the August 2009 agreement between the two countries did not have the same force in law.
It was this agreement that effectively ended the increasingly tense relations between the two countries over UBS’s treatment of US bank clients. The annex to the agreement defines the number and type of UBS clients that the Swiss tax authorities would process for handing over to the IRS.
Background: GenevaLunch
Links to other sites: 20Minutes, Le Temps, NZZ, Reuters, Wall Street Journal
This work by genevalunch.com is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported.
News story, GenevaLunch, 24 January 2010.
Filed under: Politics
Tags: Federal Administrative Tribunal, Federal Tax Administration, UBS clients, US Swiss tax treaty
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January 26th, 2010 at 5:48 am
Filing a W9 in the US is not mandatory and there is no law to support it. How could it become a fraud not to file a document that is based on voluntary disclosure ???
The global elite who is enslaving us is in desperate need for money to finance the new world order. That’s the one and only reason
January 27th, 2010 at 10:05 am
[...] (GenevaLunch) – The Swiss government meets Wednesday 27 January to review the impact of a court’s decision last Friday, which asks the Federal Tax Administration to review the case of at least 25 UBS bank clients whose [...]