World News

Swiss eyes tax haven list exit as G20 starts

ZURICH (Reuters) - Switzerland is rushing to sign an additional tax information deal to secure its removal from a tax haven list later on Thursday, when a meeting of the Group of 20 nations starts.

The logo of Swiss bank UBS is pictured in front of the Swiss Federal Palace in Bern in this July 9, 2009 file photo. REUTERS/Michael Buholzer/Files

A Swiss diplomatic source said the government planned to sign a 12th double-taxation treaty, fulfilling conditions for being be taken off the international tax haven list drafted by the Organization of Economic Cooperation and Development.

“This is the plan,” the source told Reuters.

G20 leaders agreed to name and shame offshore centers that did not cooperate on tax evasion in April and threatened them with sanctions.

That caused a political embarrassment for Switzerland and other international offshore centers, which swiftly agreed to relax their bank secrecy rules.

The pressure was particularly high on Switzerland, the biggest offshore center which manages one third of the world’s wealth, at a time when banking giant UBS was facing a tax fraud probe in the United States.

The G20 is expected to take stock of progress by offshore centers at its summit on Thursday and Friday in Pittsburgh.

Many offshore centers, including European Union members Austria and Luxembourg, have already been taken off the ‘grey list’ in recent weeks, putting pressure on Swiss authorities to act.

The list comprises countries that have not fully implemented global taxation standards. Signing the new treaty, most likely with Qatar, would allow Switzerland to be removed from it.

“With a 12th agreement we should fulfil the OECD criteria,” the source said.

An 11th tax treaty was signed with the United States on Wednesday.

The Swiss, UBS and the U.S. government settled their tax case last month, with the bank agreeing to turn over 4,450 names of clients with undeclared accounts to authorities.

The OECD already signaled on Wednesday that Switzerland will soon be taken off the grey list.

“Signing agreements is only one step in a process. What we will now be looking for is effective implementation by all countries,” OECD Secretary General Angel Gurria, attending a G20 summit that starts in Pittsburgh on Thursday, said in a statement.

But Switzerland still faces a potential domestic headache as one of the treaties will have to be put to a popular vote in a referendum.

editing by John Stonestreet