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Merz sees Swiss off OECD tax list by autumn -paper

Mon Jun 29, 2009 2:56am EDT

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* FinMin says progress towards tax deals faster than planned

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* Sees next threat to Swiss bank secrecy from EU

* Welcomes UBS capital hike

ZURICH, June 29 (Reuters) - Switzerland should have renegotiated more than enough double taxation treaties by the autumn to be removed from an OECD 'grey list', Swiss Finance Minister Hans-Rudolf Merz was quoted as saying on Monday.

Switzerland is trying to secure 12 new bilateral tax deals by the end of 2009 to be removed from the OECD list of tax havens that need to improve fiscal cooperation, and to avoid sanctions from the G20 nations.

"We have made faster progress than planned. I am proud of this, particularly as we could get all the parameters the government wanted to include into the eight signed agreements," Merz told Switzerland's NZZ.

As soon as Switzerland has clinched deals with more than 12 countries it will approach the OECD about taking the country off the grey list, Merz said, adding that this goal will be reached by the autumn.

"The next threat that I can see is less likely to come from the OECD than from the EU. There are strong trends to replace the taxation of savings income with automatic exchanges of information. That would be the end of bank secrecy," Merz said.

However, there was no danger in the short term as Switzerland would negotiate with the EU on a taxation of savings income agreement and had approached the EU a few days ago, Merz said.

"These negotiations are not problematic. But in the long term we will have to arm ourselves," he said.

Merz also said in the interview that he welcomed UBS' (UBSN.VX) move to raise $3.5 billion of fresh capital.[ID:nLQ421864]

"I welcome the fact that UBS has done another capital hike to strengthen its capital base," Merz said, adding that the government still wants to divest its stake in UBS as quickly as possible.

Switzerland said earlier this month it was in talks over its investment in UBS with various parties but had not yet decided whether to convert its mandatory convertible notes -- which would give it a 9.3 percent stake in the bank -- or sell them.

(Reporting by Katie Reid; editing by John Stonestreet)



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