ZURICH (Reuters) - Switzerland plans to cooperate with foreign authorities on tax matters and revise its tax savings deal with the European Union, the government said on Wednesday, suggesting political support for its bank secrecy is slowly waning.
The country is the world’s biggest offshore financial centre with $2 trillion in assets under management, but is under pressure from the EU and the United States to end bank secrecy as cash-strapped states seek to fight tax evasion.
It has clashed with a number of countries that have bought stolen data to track down tax cheats, and pursued informants in criminal court over breaches of Swiss secrecy and privacy laws.
The Swiss parliament, which has blocked previous tax deals with the United States, has yet to approve the steps announced on Wednesday, but the news suggests Swiss political support for protecting secret bank accounts is gradually eroding.
Finance Minister Eveline Widmer-Schlumpf said the government had decided to sign the Organisation for Economic Cooperation and Development’s (OECD) administrative assistance convention, underscoring its commitment to fight tax fraud.
In June, a government panel recommended that Switzerland be ready to share data on foreign depositors with the European Union even before a global standard is established.
The Federal Council also said on Wednesday it had adopted a draft mandate for negotiations regarding a revision of the taxation of savings agreement between Switzerland and the European Union.
Aside from pushing for more transparency, the EU has also been trying to levy a tax on hidden funds.
In 2004, the Swiss and the EU introduced a withholding tax on interest from assets held by EU citizens in Switzerland. But it only applied to taxing profits on assets held by private persons, and not to companies or trusts and foundations.
The draft mandate will be submitted for consultation to parliamentary committees and to the cantons, the Swiss State Secretariat for international financial matters said.
The Federal Council will then adopt the final mandate, and Switzerland will be able to start talks with the EU. The content of the mandate remains confidential.
Reporting by Edward Taylor and Caroline Copley; Editing by Hugh Lawson