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Canada signs deal to help find tax cheats

Swiss ministers have held a meeting with a Canadian delegation led by Prime Minister Stephen Harper during which a deal was signed to help find Canadian tax dodgers.

Economics Minister Doris Leuthard, Foreign Minister Micheline Calmy-Rey and Finance Minister Hans Rudolf-Merz met Harper and Josée Verner, the Canadian minister of intergovernmental affairs, on Friday near Bern.

During the meeting, Merz and Verner signed a revised double-taxation agreement, which unlike previous accords, opens the door for Swiss authorities to handover data to foreign investigators building cases against suspected tax cheats.

The Canadian Revenue Agency, the country’s federal tax collector, says it has a list of some 1,800 Canadian taxpayers believed to be hiding millions of dollars in undeclared Swiss bank accounts. Since September, 19 people have come forward under an amnesty programme that requires back taxes be paid but adds no penalties or interest.

But, for the moment, Swiss officials cannot be forced into handing over the data. The revised agreement must first be approved by parliaments in both countries, meaning that it is not likely to come into force until early 2012.

A Swiss-Canadian free-trade agreement that came into effect in summer 2009 has helped make Canada Switzerland’s second-largest trading partner in the Americas, with exports totalling SFr2.5 billion in 2009 (CAN$2.6 billion). Switzerland imported Canadian goods worth SFr831 million that same year.

The Canadian delegation met the Swiss authorities on the sidelines of the Francophonie, summit for French-speaking nations which is being held in Montreux.

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