The Swiss finance minister, Kaspar Villiger, says he is ready to sign a deal on the taxation of savings with the European Union, provided speedy agreement is reached on nine other issues.This content was published on June 4, 2003 - 21:15
His comments came after EU finance ministers agreed a common policy for the Union.
Villiger said on Wednesday that he expects a quick conclusion to a second round of bilateral negotiations with the EU.
Brussels is keen for Switzerland to sign up to its "savings tax directive" - agreed on Tuesday - which would allow EU citizens' savings income in Switzerland to be taxed. The system would however leave Swiss banking secrecy intact.
Villiger said the main sticking points in the negotiations are on fraud and Swiss participation in the Dublin and Schengen agreements on border controls and asylum policy.
The Swiss want the accords wrapped up as soon as possible in case there is a referendum in Switzerland on accepting the agreements, which would delay implementation.
Robert Waldburger, a senior finance ministry official, told swissinfo that the talks could be concluded within a few weeks. "The accord would probably not be applicable before 2005 at best, as it would still have to pass through Parliament," he added.
Villiger said he was pleased with the outcome of the discussions surrounding the EU tax accord, but warned that nobody should get carried away with the result.
"Switzerland made a substantial offer to the European Union," he said.
That offer would involve Switzerland transferring a levy on EU citizens' investment income to Brussels. But Bern will not provide information about account holders without their consent because to do so would compromise banking secrecy.
Villiger added that the deal would likely cost Swiss banks hundreds of millions of francs to upgrade their computer systems to comply with new rules.
EU finance ministers reached an agreement on the savings tax directive on Tuesday after nearly 14 years of deadlock. The accord is aimed at stamping out tax evasion and preventing money laundering and fraud.
The Swiss Bankers Association said it was basically happy with the EU deal.
"In principle, we are satisfied," spokesman James Nason told swissinfo. "The main thing is that financial privacy is fully preserved."
He added that banks would face substantial costs in complying with the agreement. "It's certainly not going to be cheap. It's going to involve a lot of administrative work - finding out who is an EU citizen and where he is liable for tax."
Under the directive, 12 of the EU's 15 member states would exchange information on non-residents' savings so they could be taxed accordingly.
But Switzerland, along with EU members Belgium, Luxembourg and Austria, would have an exemption, and instead levy a withholding tax on EU citizens' savings income.
The tax would be increased gradually to 35 per cent by 2011, with 75 per cent of the funds being transferred to the EU.
Overseas account holders would be given the choice of declaring their assets in Switzerland or remaining anonymous and having 35 per cent of their savings income deducted from their accounts.
swissinfo with agencies
The Swiss government wants concessions from Brussels in return for joining the EU's new tax regime.
Bern is seeking to conclude nine other agreements governing issues such as cross-border fraud and asylum.
The Swiss are in a hurry because a referendum may need to be held before the accords can be implemented.
The tax deal would involve Switzerland transferring a levy on EU citizens' investment income to Brussels.
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