Switzerland’s Federal Administrative Court has ruled in favour of a Credit Suisse client who had complained about his data being sent to the United States tax authority.This content was published on April 11, 2012 - 09:46
Last year, the American Internal Revenue Service (IRS) filed a request for administrative assistance based on the Swiss-American double taxation convention. This was approved by Switzerland’s Federal Tax Administration (FTA).
In particular it was looking for the account details of suspected tax evaders. Credit Suisse employees in the US were criticised for helping clients to hide their assets from the IRS. No client names were included in the request.
Credit Suisse gave the FTA the requested data in early November. In January, the FTA concluded that all conditions had been met for granting administrative assistance – yet put a stop to the data transfer because of the client’s legal complaint.
The FTA concluded that while some of the bank employees could be accused of fraud, the bank clients could at best be accused of evasion, which is not illegal in Switzerland.
The Federal Administrative Court ruled that according to its agreement with the US, single instances of tax evasion are not eligible for administrative assistance – even if large amounts are at stake. The court also maintains that failure to report an account is not fraud under Swiss law.
In early 2010, the court also blocked the delivery of data on American UBS clients for lack of a legal basis. In June that year, parliament approved an agreement with the US on mutual assistance regarding UBS account data.
The IRS then demanded comprehensive data on the number and assets of wealthy US customers at around ten other Swiss banks. In September 2011, Switzerland delivered some statistical data without giving specific information about the individuals concerned.
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