Update 20:25 Bern, Switzerland (GenevaLunch) – The Swiss government will not automatically hand over details of UBS accounts to the IRS, the US tax authority, without giving account owners a chance to defend themselves, Bern announced Tuesday 17 November: if Switzerland’s tax authority decides to turn over information to the IRS, account holders will first be notified and given a “chance to state their case.”
The announcement appears to be at odds with a remark attributed by the New York Times to Douglas Shulman, IRS commissioner, at a press conference held in New York Tuesday. He is reported to have referred to “‘the obligation that the Swiss have taken to the US government to produce 4,450 names’ to the IRS, he said.” But Switzerland says it will review the 4,450 accounts agreed upon and make a legal decision in each case about providing assistance to the IRS.
The Swiss government and the IRS Tuesday separately announced details of the process covered by their agreement, signed in August, concerning 4,450 UBS accounts where the IRS has asked for assistance as it chases tax evaders. Switzerland says the UBS affair will cost the government CHF40 million, with a team of some 40 legal and tax experts working fulltime for a year to decide in which of the cases Switzerland will provide assistance. Additional help from specialists will be called in if necessary.
The IRS’s Shulman also announced that more than 14,700 people had come forward under a tax amnesty that ended 15 October, for non-compliant taxpayers, well over the 100 or so who turn themselves in, in most years. He noted that the IRS case brought against UBS in 2008 will be dropped only if the US tax authority receives the names of 10,000 UBS clients, either through Swiss assistance or by the clients turning themselves in. The taxpayers who took advantage of the amnesty were from several countries and from many banks.
Tax adviser Gregory Dean of US Tax & Financial Services in Geneva Tuesday evening cautioned that “We should not lose sight that the voluntary disclosure programme still exists – the special programme promoted by the IRS closed October 15, but this has created the wrong impression that people can no longer come forward under the voluntary disclosure programme. This programme still exists, though the IRS approach to a post-October 15 disclosure is a little uncertain. What is certain is that voluntary disclosure is not available where the IRS has initiated an investigation of a taxpayer.”
Ed. note: The documents which make up the annex to the agreement between the two countries are available, but only in German, on the federal government’s web site.
Highlights of the agreement
Japan has pledged $5 billion in additional assistance to Afghanistan’s government just days before US President Obama arrives in Tokyo for an official visit on Friday, 13 November. The increase in aid will go towards building schools, demining, training policement, and rehabilitating Taliban fighters. Obama is to announce a new strategy for the US presence in Afghanistan after he has finished with consultations, perhaps before the end of the week.
The US has said it will expect Afghan President Hamid Karzai to meet clear measures to reduce the corruption that is seen to plague his administration. Western countries have increasingly seen corruption and a lack of transparency as undermining the the government’s legitimacy, putting a brake on development and giving the Taliban a political opening among the population. AFP, Bloomberg, New York Times
Zurich, Switzerland (GenevaLunch) - Two popular initiatives, both dealing with assisted suicides, have gathered enough signatures to call for a vote in canton Zurich. No date has been scheduled for the votes. The first calls for the canton to allow assistance but only for people who have been resident in the canton for at least a year. The second calls for the canton to insist on a change in Swiss federal law by banning all encouragement of and assistance to people committing suicide.
Both initiatives were started by the UDC, Switzerland’s right-wing party. Swiss citizens vote several times a year, at all three political levels (communal, cantonal, federal) on grassroots or political party initiatives that have gathered a minimal number of signatures.
