France critical of UK and German tax secrecy deals

The French politician responsible for coordinating France’s efforts to combat tax evasion, François d’Aubert, has attacked the tax agreement recently made between the UK and Switzerland, according to French financial paper Les Echos.

Switzerland signed an agreement with Germany in early August providing German authorities with a one-off €2.6bn payment as well as 28% tax payments on future income from German-held Swiss bank accounts. In return, Switzerland does not have to disclose the names of the German account holders.

The UK followed suit with a similar arrangement. UK taxpayers with undeclared assets in Swiss banks now have to make a one-off payment of up to 34% and a flat-rate tax of 48% on future income. Switzerland will continue to preserve the anonymity of UK account holders.

“France is opposed to continued banking secrecy,” d’Aubert asserted, adding that Switzerland’s recent agreements with the UK and Germany were disappointing.

“Switzerland is side-stepping Europe with the obvious consent of Germany and the UK,” said D’Aubert. He also presides over the OECD group responsible for evaluating tax havens, the peer review group (PRG) of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

There is no suggestion that Switzerland will try to reach a similar agreement with France, although Swiss officials may start looking elsewhere in Europe for further bilateral agreements.

In March of this year Sweden signed a tax and information exchange agreement (TIEA) with Switzerland giving the Swedish Tax Agency (Skatteverket) access to information about possible accounts and assets held with Swiss banks.

Many believe the agreements with the UK and Germany could complicate ongoing discussions at European Council level about proposed changes to the 2003 Savings Taxation Directive. In November 2008 the European Commission adopted a proposition to amend the Directive in an attempt to close existing loopholes and better prevent tax evasion.

According to Les Echos, France is hopeful that amendments to the directive will remove another layer of tax secrecy by enforcing further information disclosure between European member states.


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