ZURICH, June 7 (Reuters) - Switzerland is no rush to start talks about a new double taxation agreement with Germany in the wake of the relaxation of its banking secrecy, the Swiss finance minster was quoted as saying.
“I am in no rush,” finance minister Hans-Rudolf Merz told Swiss Sunday paper NZZ am Sonntag in an interview.
Merz said he would meet his German counterpart Peer Steinbrueck for a dinner on the sidelines of a high-level meeting on tax havens in Berlin on June 23.
“But there is no question that we will negotiate a double taxation agreement with Germany: Businesses do not want that we engage in cockfighting, they want that the cooperation of the two countries works,” Merz said. Germany has been one of the main supporters of a global campaign against tax cheats and managed to gather support for the naming and shaming of Switzerland and other opaque offshore financial centres at a G20 meeting in April. [ID:nL2335018]
Switzerland, whose private banks manage around $2 trillion of foreign wealth, needs to offer more tax cooperation to avoid G20 sanctions. It has vowed to adopt international standards for tax transparency and cooperation in 12 new treaties it needs to sign by year-end to get off the hook. [ID:nL679144]
Merz repeated Switzerland was working urgently to secure the 12 agreements by the end of the year.
In the case of the negotiations with the United States, Merz remained cautious about whether the Swiss would get a U.S. lawsuit against UBS AG UBS.NUBSN.VX dropped in return for a treaty.
CASH INJECTION
“I don’t know if the deal succeeds,” he said. But he added that U.S. finance minster Tim Geithner had understood the U.S. had to budge, too.
The U.S. Internal Revenue Service is seeking to force UBS to reveal the identities of 52,000 Americans suspected of using accounts at the bank to hide about $14.8 billion of assets and evade U.S. taxes.
The Swiss government had to bail out UBS last year, giving it a badly needed 6 billion Swiss franc ($5.6 billion) cash injection in exchange for mandatory convertible notes worth a stake of 9.3 percent in the bank.
The government would exit this investment as soon as it was justifiable, Merz said, echoing recent comments in parliament.
“We will not place the shares just anywhere, but place them where it is reasonable for UBS,” he said. Main criteria for the exit were the stabilisation of the bank and possibly a full return of the government’s investment.
The lock-up period for converting the notes ends next week but most analysts do not expect the government to exit immediately, especially as regulators are against a hasty sale.
The head of Swiss regulator Finma, Patrick Raaflaub, told the NZZ in another interview it was the government’s decision if and when to exit.
“Our focus as regulators is that UBS has rebuilt enough resilience first to weather potential further shocks without needing government help again,” he said. (Reporting by Sven Egenter; Editing by David Holmes)
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