Swiss Court Blocks Data Release to U.S. Government

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A Swiss court blocks data release, ruled that Swiss financial firms are under no obligation to disclose clients’ account information to U.S. tax authorities because such requests for assistance in relation to tax evasion is not covered by a 1996 treaty.

On September 26th 2011, Credit Suisse Group told some customers that the U.S. Internal Revenue Service had sent a request through the Swiss Federal Tax Administration for the names of Americans with accounts owned through a domiciliary company.

Switzerland and the U.S. later held negotiations to resolve an investigation involving 11 Swiss financial firms that allegedly helped customers hide money from the IRS.     Washington was pressuring banks in Switzerland to disclose the names and financial details of its customers.

Switzerland argued that request for identification was based solely on a suspicion of tax evasion and did not include the bank account holder’s name.    Such requests present an administrative assistance and cannot be granted, because it only surrounds potential of tax evasion.    Court’s recent ruling is a set back in trying to resolve this dispute between two countries.

Unlike most countries, Switzerland has distinguished between tax fraud, which is illegal, and tax evasion, which is not.

Anna Timone (195 Posts)


Comments

  1. Great! Now that’s what I call customer confidencial.
    Well done Swiss government.

  2. Eh? Here in the UK tax avoidance (buy farmland, donate to charidee) is legal but tax evasion is illegal.

  3. Both tax evasion and fraud are illegal, but evasion is a misdemeanor and fraud is a crime in Switzerland.
    http://en.wikipedia.org/wiki/Taxation_in_Switzerland#Tax-related_criminal_law

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