Bern, Switzerland (GenevaLunch) - Swiss Finance Minister Hans-Rudolf Merz and his German counterpart, Wolfgang Schaeuble signed an agreement 27 October in Bern to open formal negotiations on cooperation in tax matters and improved market access by banks. They also signed a revised double taxation agreement.
Germany has long criticized Switzerland’s position on bank secrecy which has permitted German citizens to hide money from the German taxman. Switzerland has said it will not cooperate if German requests for administrative assistance are based on stolen bank data. Wednesday’s agreement lays out a common approach to tax evasion.
Negotiations start in January 2011. Opposition parties in Germany and Switzerland have criticized the agreement, according to NZZ.
HSBC bank in Geneva
Bern, Switzerland (GenevaLunch) – The double taxation treaty between Germany and Switzerland may be signed by Federal Councellor Hans-Rudolf Merz before he steps down this month.
The agreement with Germany, whose citizens hold more money in Swiss banks than those of any other nation, has led to frequent friction between the two countries, as Germany attempts to claw back undeclared money in secret Swiss bank accounts.
The Swiss have been particularly troubled by several cases of theft of bank client details, which have then found their way into the hands of foreign tax authorities.
One of the ideas originally floated by the Swiss side was an anonymous tax on all foreign-held bank accounts in Switzerland, which would then be handed over to the foreign tax authorities. Account-holders who declare their assets to their home countries could expect to have the tax returned; the others would forfeit the amount. The idea was originally refused by the then German finance minister, but negotiators have been taking another look at it.
Swiss parliament in session Photo ©Swiss parliament
Election could create first European cabinet with women in majority
Complete coverage, Swiss Federal Council 2010 elections: background, Sommaruga win, Schneider-Ammann win
Update 09:00 Bern, Switzerland (GenevaLunch) – The world has a rare opportunity Wednesday 22 September to see what balance of power really means, as defined by the Swiss: parliament will elect two new councillors out of seven on the governing Federal Council, sometimes referred to in English as the cabinet. The parliamentary vote is the result of the resignation announced several weeks ago by two long-serving council members, Hans-Rudolf Merz in August and Moritz Leuenberger, in July. Both agreed to remain in office until new councillors were elected.
The Federal Council is at the heart of a political system that emphasizes continual balance and negotiation, with no one party holding the power. The seven members’ council debates are not public and they rule by consensus, so council decisions are announced only once they have come to an agreement on an issue or new law.
Collegiality, or not airing their differences, has been the norm for at least two decades, with occasional blips where one councillor is viewed by the others as stepping out of line. Christoph Blocher, member of the right-wing UDC party, upset the council with several public remarks in 2008 that were considered unrepresentative of the council’s stance on issues, and his failure to be re-elected sparked an ongoing Swiss debate over precisely how the main political parties should be represented on the council.
The election process and a solar bird overhead
The Federal Assembly, the body of both houses of parliament, will elect first a successor to Leuenberger, as the councillor who has served longer, then a successor to Merz.
Moritz Leuenberger sooner-than-anticipated departure will allow parliament to vote at once for two new cabinet ministers
Bern, Switzerland (GenevaLunch.com) – Swiss Federal Councillor Moritz Leuenberger (above right), current Minister of Transport, Communications, Energy and Environment, is bringing forward his departure date from the Federal Council, from December to October, to allow parliament to vote for two new ministers at once.
The announcement came in on 9 August just days after Federal Councillor Hans-Rudolf Merz, Minister of Finance (above left), announced he would leave his post in October.
Leuenberger, 63, a Socialist Party member, had originally announced that he would step down in December. The Minister had wanted to stay until the end of the year to see the completion of the digging of the Gotthard Tunnel and to attend the next UN climate change conference in Mexico. The exact date of departure will be announced next week during a cabinet meeting.
The cabinet elections by parliament will take place 22 September.
Hans-Rudolf Merz, Swiss federal councillor
Bern, Switzerland (GenevaLunch) – Federal Councillor Hans-Rudolf Merz, a member of the seven-person executive and former President of Switzerland, has announced his resignation. He said the decision had been “difficult”.
Merz has been finance minister since 2003. He came in for much criticism as president in 2009 due to the UBS scandal and its ramifications with the USA and his handling of the Libya crisis.
Parliament will choose successors to the two longstanding politicians in the Autumn.
In July, his colleague Moritz Leuenberger announced he was stepping down at the end of the year.
Federal budget for 2011 gets government approval
Government likely to weigh it down with VAT
Bern, Switzerland (GenevaLunch.com) – The Swiss Federal Council wants to see a single value-added tax (VAT, called TVA in French) rate of 6.2 percent, it said Thursday 24 June. An earlier plan by the ruling council for a single rate VAT, a project dear to Hans-Rudolf Merz, finance minister, failed earlier when both houses of parliament made substantial changes to the proposal.
The new proposal, which now goes to parliamentary committees for consideration, would do away with 21 of the 29 exceptions to the tax, and would add or increase the rate of the VAT tax on medicine and medical treatments, educational training, food and non-alcoholic beverages.
Negative reaction from a number of consumer and industry groups has been swift and largely negative, although economiesuisse and hotelleriesuisse support the change, which Merz argues is necessary to boost the economy.
The complexity of the current VAT system carries a cost and simplifying it would provide 1 percent growth.
The Swiss government’s proposal comes just days after the British government increased the VAT to 20 percent.
2011 budget carries weight of extra VAT charge
The government also approved the 2011 federal budget plan Thursday: revenues will go up 3.8 percent and expenditures 3.3 percent, but the strong growth includes a short-term additional VAT charge.
Revenues would be 2.3 percent and expenditures 1.9 percent without it. The Swiss voted for the additional VAT in 2009, to cover the deficit of the federal disability insurance fund.
Links to other sites (Fre): economiesuisse, hotelleriesuisse, Le Temps, TSR and government press release on the proposed VAT change
Swiss President Doris Leuthard
Bern, Switzerland (GenevaLunch) - A hallmark of the Swiss political system, the “collegiality” of the Federal Council or ruling seven-member cabinet, is under pressure from politicians and Swiss media following disclosures about the handling of the recently resolved Libyan affair. Politicians have expressed concern about possible military involvement. Swiss military intervention abroad is strictly limited by the country’s neutrality. Media have been insisting the disclosures show a serious lack of communication within the Federal Council.
Tuesday 22 June a permanent parliamentary group issued a terse statement to say that it met Monday with the Federal Council to review the handling of the Libyan affair. The statement noted that it had been informed “relatively early” of plans by the Defense Department to stage a rescue of the businessmen, considered hostages, if the situation developed in such a way this would be called for. The statement provides no date, however, and it is unclear when the plans were developed by the Defense Department.
Le Temps and TSR question if the plans existed when then-President Hans-Rudolf Merz flew to Libya, without informing other Federal Council members, to apologize to Libyan leader Muammar Qadaffi over his son’s arrest. Was Merz aware of such plans, they ask, but given the secrecy surrounding the plans, no explanations appear likely.
Record profits at UBS
Update 13:30 Zurich, Switzerland (GenevaLunch) – Swiss banking giant UBS has announced that pre-tax profits for the first quarter of 2010 will reach CHF2.5 billion. The statement was made ahead of its annual general meeting, which takes place takes place 14 April. Swiss media reports Monday indicate that the meeting Wednesday is likely to be a heated one.
This is its highest pre-tax profit since 2007.
Net client withdrawals from its wealth management units were down more than CHF15 billion from Q4 in 2009.
Institutional investors’ rep Ethos opposes remuneration and discharge agenda items
Two agenda items have prompted a group of investors led by Ethos to put up a fight at the annual general meeting Wednesday: the discharge of the board and executive committee members for 2007, 2008 and 2009 and the bank’s remuneration policy. Ethos is a UBS shareholder that represents a number of large Swiss institutional investors, notably several pension funds.
UBS announced its decision, in December, to clear the board and committee members from 2007-2009 of criminal wrongdoing, after internal and Finma (Swiss banking supervisory body) investigations into the bank’s losses and problems with the US tax office, the IRS.
Swiss Finance Minister Merz confirms no automatic data exchanges
Canada initials agreement, France confirms Davos “understanding”
Bern, Switzerland (GenevaLunch) – Switzerland’s push to build up its stable of bilateral tax agreements in line with OECD standards moved ahead last week. Among other moves, a new agreement with Canada was signed, the same day that a Mafia boss in Montreal pleaded guilty to hiding $5 million in three Swiss bank accounts from the Canadian taxman.
Monday 15 February Figaro newspaper in France published a list of 18 countries that France is calling its black list of governments that are not cooperative in fiscal matters, with the bulk of them in Latin America. Switzerland does not figure on the list.
Which way in Davos for the world economy. © 2010 World Economic Forum swiss-image.ch/Photo by Michael Wuertenberg
Davos, Switzerland (GenevaLunch) – The World Economic Forum (WEF) runs from 27-31 January in the snowy Swiss resort of Davos, and, ostensibly, the leaders will be discussing the state of the world and ways to improve it. Behind the scenes, they will be networking.
It isn’t every day that so many movers and shakers come together in one place.
The WEF is dedicated to bringing together the “world’s business and political leaders. . . to discuss the issues facing the world today.” It aims to bridge cultures and countries, and bring the best minds and experts to “allow leaders to make decisions that can bring about change for the better,” the Geneva-based non-profit group says on its web site.
World Economic Forum facts and figures
Swiss Federal Council (cabinet), 2010
Bern, Switzerland (GenevaLunch) – Switzerland’s cabinet, the seven-member Swiss Federal Council, which governs as a body of equals, has published its official photo for 2010. Left to right: Didier Burkhalter, the chancellor for the Swiss Confederation Corina Casanova, Eveline Widmer-Schlumpf, Ueli Maurer, Micheline Calmy-Rey, Hans-Rudolf Merz, Swiss President Doris Leuthard, Vice-president Moritz Leuenberger. The presidency is a one-year rotating position, while the chancellor’s job is to oversee the smooth functioning of the administrative side of the government.
Hans-Rudolf Merz
Update 18:00 Bern, Switzerland (GenevaLunch) – France says it did not break any French laws in accepting stolen data from a Swiss branch of HSBC, and right-wing politicians in Paris called for Switzerland to be put onto an OECD black list of tax havens if the Swiss refuse to ratify a pending treaty with France over the theft. Switzerland says that France, in failing to provide judicial assistance in the matter, is not respecting the terms or spirit of the treaty.
The Swiss government late Wednesday 16 December said it intends to suspend the ratification of the new double taxation treaty with France. The news followed comments to the media by France’s budget minister, Eric Woerth, that he plans to start judicial proceedings based on information stolen from the Geneva branch of HSBC.
Swiss President Hans-Rudolf Merz says that he is asking the Swiss commission in charge of the ratification process, scheduled to meet in February, to hold off until the circumstances surrounding the theft, which took place in Switzerland, are clearer. The French citizen who stole the data has come forward publicly, and he is now being given a new identity in the south of France.
At issue for the Swiss: France has not responded to Switzrland’s repeated requests for judicial assistance, and no information has been provided about the stolen data. The theft, which started in July 2008 by an IT employee at the bank, is illegal under Swiss law. “In a state of law, this type of theft is unacceptable,” Merz told media Wednesday.
Hans-Rudolf Merz, Swiss president
Bern, Switzerland (GenevaLunch) – Swiss President Hans-Rudolf Merz has no regrets about his actions in the on-going disputes the country has with Libya, he says in a lengthy interview with 20Minuten, the German edition of the daily free newspaper. “I would do everything exactly the same way again.” Switzerland has been trying to obtain the release of two Swiss businessmen held in Tripoli, Libya since July 2008, after the son of Libya’s leader Muammar Qaddafi was arrested in Geneva days earlier.
Merz says he is sure the agreement he signed and the apology he gave to Libya 20 August should have freed the two men. The Swiss government announced at the time that the two would be back in Switzerland by the end of August, and sent an airplane to Tripoli to fly them home.
Hans-Rudolf Merz, Swiss president, finance minister
Bern, Switzerland (GenevaLunch) – Swiss Finance Minister Hans-Rudolf Merz has put negotiations on the new Swiss-Italian double taxation treaty on hold until further notice. The move follows a raid by Italian tax authorities on Italian branches of Swiss banks last week and rumours of Italian officials spying on their countrymen in canton Ticino, which has caused outrage in Ticino. The tax treaty was ready to be ratified by the parliament, reports Sonntagsblick in an interview 1 November.
Merz has designated Renzo Respini, a former member of the upper house of Parliament, to be the government’s special political advisor in tax questions concerning Italy.
Surprise at Italy's actions
Lugano, Switzerland (GenevaLunch) - Italian tax authorities raided 76 branches of Swiss banks in 22 cities around Italy, 27 October, ostensibly checking to see whether the institutions were in compliance with reporting requirements on bank operations. Federal Counsellor Pascal Couchepin said on national radio that they “were desperate measures” and suggested that the social contract between the Italian government and its citizens was in “bad shape”.
Italians who travel to Switzerland overland have been subjected to unprecedented border checks, with closed circuit cameras and police dogs at the border. The Italian finance and economy minister, Giulio Tremonti, has said that he wants to “dry up” the banks in Ticino, where it is estimated that most Italians have deposited their money.
Bern, Switzerland / New York, NY, USA (GenevaLunch) – Swiss President Hans-Rudolf Merz capped off a busy political week for Switzerland with an address to the United Nations General Assembly where he argued that because “the G-20 lacks legitimacy” exchanges between the UN and the G20 group of nations “must be strengthened. The G-20 has taken over a role in discussing important global issues. This development must not take place at the expense of other nations or global institutions such as the UN.” Libya and Switzerland’s removal from the OECD gray list also made headlines in Switzerland and elsewhere.
G20 needs to create level playing field: Merz
Merz told world leaders Thursday 24 September at the assembly that “basic considerations of due process are absent in the sanctions procedures. The members of the G-20 themselves are not subject to the same scrutiny. Switzerland advocates a level playing field and a much better consultation among non-members of the G-20.”
Bern, Switzerland/New York, NY, USA (GenevaLunch) – Swiss President Hans-Rudolf Merz and Libyan leader Muammar Qadaffi met in New York on the fringes of the UN General Assembly, to discuss the fate of the two Swiss businessmen who have been detained in Libya since July 2008. Qadaffi, the Swiss foriegn affairs ministry says in a Thursday noon, 24 September press release, is taking up their cause himself: “The Leader of the Revolution assured President Merz that he would commit himself personally to bringing about their release.”
The men were widely understood in Switzerland to be able to return to the country by the end of August 2009, but Libya has to date not released them, claiming administrative delays.
Libya Wednesday 23 September dropped its civil case against Geneva, pending the outcome of a three-person international arbitration tribunal. The tribunal is reviewing charges by Libya related to the arrest of Hannibal Qadaffi and his wife Aline in July 2008, at a hotel in Geneva.
Siberian bear cubs (Photo: RANDO)
Siberian bear cubs, welcomed at Bern's Tierpark (Photo: RANDO)
Bern, Switzerland (GenevaLunch) – Russia’s president, Dmitry Medvedev, arrived in Bern 21 September to military honours and a town that was completely locked down for security reasons. It is the first state visit to Switzerland by a Russian head of state. Medvedev thanked his host, Swiss President Hans-Rudolf Merz, for representing Russia’s interests in its conflict with Georgia, and he suggested that Swiss neutrality might enable Switzerland to act as a go-between to build bridges between Russia and Nato in order to advance Russia’s new vision for security in Europe.
Switzerland’s programme for economic cooperation with Eastern Europe has supported the transition process in the Russian Federation since 1993. The focus has been mainly on building the private sector, sustainable development of natural resources and governance issues such as migration, human trafficking and prison management.
Switzerland has been working with Russia on sustainable forest projects for several years, part of the economic cooperation programme.
Four agreements were signed at the end of the first day of the two-day visit, covering visas, repatriation, aid in cases of disaster, and a memorandum on sport. The two countries have now signed several treaties.
SBA CEO Urs P Roth
Zurich, Switzerland (GenevaLunch) – EU citizens with bank accounts in Switzerland will pay a withholding tax on income from all investments, not just on savings income as at present, if a proposal from the Swiss Bankers Association (SBA) goes ahead. The group, at its annual meeting in Zurich 17 September suggested that the money collected would be transferred to the respective countries’ tax authorities without disclosing the name of the bank customer. The SBA proposal would extend withholding tax on EU citizens to include dividend income generated by stocks and mutual funds, as well as capital gains.
Switzerland has levied a withholding tax on its own and EU citizens since 2005, but it covers only income from certain types of investment, principally from bonds.
Bern, Switzerland (GenevaLunch) – Dmitry Medvedev and his wife Svetlana Medvedeva will make a state visit to Switzerland 21-22 September, with a day in Bern and a day touring central Switzerland with Swiss President Hans-Rudolf Merz.
Swiss President Hans-Rudolf Merz
Update 16.10 Bern, Switzerland (GenevaLunch) - Libya has named Saad Jabbar as its representative on an independent tribunal that is part of its 20 August agreement with Switzerland, which is designed to end a diplomatic impasse. Jabbar is a British lawyer who reportedly worked with Libya in the Lockerbie bomb affair. The move is the first sign this week that Libya intends to respect the agreement.
The Swiss Federal Council (cabinet) said Wednesday afternoon 2 September that it will respect the agreement signed with Libya, despite Libya’s failure to release two Swiss citizens by the end of August, also part of the agreement. The government says it will insist that Libya, too, hold up its end of the bargain.
© 2009 CICG
Complete coverage of the WCC-3 by GenevaLunch
Conference is 31 August – 4 September 2009
Geneva, Switzerland (GenevaLunch) – The third World Climate Conference (WCC-3) promises “better climate information for a better future” but in the immediate short term it is expected to cause a severe strain on Geneva’s traffic and accommodations this week.
Hans-Rudolf Merz, Swiss president and finance minister
Bern, Switzerland (GenevaLunch) – Swiss Finance Minister Hans-Rudolf Merz signed a new double-taxation treaty with his French counterpart, Christine Lagarde in Bern 27 August. The new treaty is the thirteenth Switzerland has signed since March, after Luxembourg and Denmark.
It brings Switzerland in line with the OECD standards for administrative assistance in cases of tax fraud, according to the Swiss government. Lagarde said in Bern that banking secrecy can no longer be used by one of the two states to refuse to provide information.
Update 19:00 Bern, Switzerland (GenevaLunch) - Two Swiss men who have been held in Libya and living at the Swiss Embassy in Tripoli since July 2008, and who were expected to fly home Tuesday, are still in Libya. The Swiss government raised its veil of silence late Wednesday 26 August with a statement on the situation, noting that “The Libyan Prime Minister informed the President in writing this morning that it was only a matter of time before the administrative procedures required in Libya were finalised.” The two businessmen have been issued exit visas to leave the country.
The men are now awaiting permission from Libyan judicial authorities to take a plane back to Switzerland. A team from the Swiss president’s office is in Tripoli waiting to accompany them.
Bern, Switzerland (GenevaLunch) - The curious and much-publicized case of the Swiss president apparently deciding unilaterally to apologize to Libya’s leader Mouammar Qadaffi over the arrest of the latter’s son in Geneva in July 2008 is taking another turn. TSR television reports that a Swiss government airplane has left Bern for Libya, possibly to pick up two Swiss men who have been held hostage there for more than a year.
One way to salvation
Update 10:50 Bern, Switzerland (GenevaLunch) - Swiss President Hans-Rudolf Merz signed an agreement yesterday 20 August in a surprise visit to Tripoli, Libya during which Switzerland apologized for the “unjustified and unnecessary” detention of Hannibal, the son of Libyan leader Muammar Qadaffi. This puts an end to the ongoing dispute between the two countries that was detonated by the arrest of Hannibal and his wife in a Geneva hotel room in July 2008, where they were allegedly mistreating their servants.
The agreement allows two Swiss businessmen, who had been denied exit permits, to leave Libya, and all consular and commercial ties between the two countries will resume, including commercial air links.
Bern, Switzerland (GenevaLunch) – The Swiss federal council refuses to give up documents related to the Tinner affair and intends to go ahead with its decision to destroy them, despite a court order to the contrary, Swiss president Hans-Rudolf Merz told Swiss German radio DRS yesterday.
Washington, DC (GenevaLunch) - The US Justice Department has e-mailed major US media to deny a story that appeared 23 June in the New York Times, calling the report that the government plans to drop a lawsuit again Swiss bank UBS “simply untrue.”
Hans-Rudolf Merz, Swiss president
Bern, Switzerland (GenevaLunch) – Switzerland is ready to revise its double tax treaty with Germany, Swiss President Hans-Rudolf Merz told Peer Steinbrueck, the German finance minister, when the two met in Berlin Monday 22 June. Merz says the Swiss government wants to quickly implement its 13 March decision to bring Swiss tax law into line with international standards, but that Switzerland expects Germany to allow unhampered access by Swiss financial service providers to its markets and an agreement on taxation of Swiss airline employees who work in Germany, the government announced in a communiqué. Both men after the meeting played down the recent spat caused by Steinbrueck’s comments on Swiss banking secrecy.
Bern, Switzerland (GenevaLunch) – Switzerland made no concessions to the US in the tax agreement that was initialed 18 June, and the case of UBS, which is being taken to court in the US to reveal names of account holders, was not part of the discussions, says Swiss President Hans-Rudolf Merz.
