Switzerland and Austria reached an agreement to end a dispute over tax evasion by wealthy Austrians holding offshore accounts with Swiss private banks.
“Under this agreement, persons resident in Austria can retrospectively tax their existing banking relationships in Switzerland either by making a one-off tax payment or by disclosing their accounts,” Switzerland said in a statement today.
The accord comes after Switzerland agreed in March 2009 to meet international standards to avoid being blacklisted as a tax haven by the Organization for Economic Cooperation and Development. The settlement may trigger outflows by Austrians who question the value of cross-border accounts as Swiss banking secrecy crumbles and follows a similar agreement with Germany and the U.K. last year.
The agreement with Austria, which is expected to come into force in 2013 and requires approval from both countries’ parliaments, will tax existing assets at a rate from 15 percent to 38 percent, depending on the duration of the client relationship and the amount of capital. Swiss banks will in the future levy 25 percent on capital gains earned by Austrians with offshore accounts. Revenue generated will go to the Austrian Finance Ministry, while client identities remain secret.
Austria has said that it expects to raise 1 billion euros ($1.3 billion) from the one-time levy in 2013 and has budgeted this revenue for next year.
“It can be positively noted that both an upfront payment and the system control measures have been waived,” the Swiss Bankers Association said in a statement following today’s announcement. “This sends out a clear signal for future tax agreements with other European countries.”
As part of the previous accords, Swiss banks agreed to pay 2 billion Swiss francs ($2.2 billion) to the German government and 500 million Swiss francs to the U.K.
Switzerland is trying to restart tax talks with Italy, Swiss Finance Minister Eveline Widmer-Schlumpf said in an interview with 24 Heures published today. While there was contact with French Finance Minister Francois Baroin over the “winter,” tax negotiations with France will have to wait until after the presidential election, the paper said.
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