WRITTEN ON August 7th, 2009 BY David Moss AND STORED IN Uncategorized

Swiss official warns approval of new US tax treaty unlikely absent UBS deal

Switzerland’s Parliament is not expected to approve a tax treaty with the US, which incorporates OECD standards of tax information exchange, unless the US litigation against the Swiss bank, UBS, is resolved.

The Swiss Government hopes that an extra-judicial settlement will be found.

On 8 July 2009, the Justice Ministry announced that it would prevent UBS from complying with a court ruling to provide the US authorities with customer bank account details. To guarantee that Swiss rules are not breached by UBS, the Government might even seize the relevant information from the bank.

This article [not available] provides further details of the legal action against UBS, and its implications for the US/Swiss tax information exchange agreement that was concluded on 18 June 2009. The later article [not available] reports that on 13 July 2009, the IRS litigation against UBS concerning the disclosure of the bank’s US customer accounts was postponed until 3 August 2009, because the US and Swiss Governments are currently negotiating to resolve the matter.

Swiss media have stated that both parties are considering an agreement to suspend the litigation until 25 September 2009, and allow US customers of UBS a partial amnesty to encourage them to voluntarily settle with the IRS. A Swiss newspaper has reported that the eventual deal between the US and Swiss authorities will include new administration cooperation procedures with a wider definition of tax fraud, but it has not disclosed the source of any of its information.

A Swiss analyst has suggested that UBS might offer substantial compensation for penalties and taxes.

When the US asked the UK to provide them with all our travel details, the UK agreed, and thus eBorders. Ditto the EU – Franco Frattini started out talking tough, then rolled over and asked for his tummy to be tickled.

Some governments are more ideal than others.