Merz believes Swiss will leave OECD tax list

Finance Minister Hans-Rudolf Merz says he expects the Swiss to have negotiated enough double taxation treaties to be removed from the OECD's "grey list" by autumn.

Merz, quoted in the Neue Zürcher Zeitung newspaper on Monday, said that more progress on the issue had been made than planned.

Switzerland is trying to secure 12 new bilateral tax deals by the end of 2009 so that it can be removed from the Organisation for Economic Co-operation and Development’s list of countries that need to improve fiscal cooperation. It also hopes to avoid sanctions from the G20 group of nations.

Merz said that faster progress had been made than planned and that the government would ask to be taken off the list.

To date eight such agreements have been initialed or agreed to in principle between Switzerland and the Netherlands, Japan, France, the United States, Denmark, Norway, Mexico and Luxembourg.

Merz said that the next threat was more likely to come from the European Union than from the OECD.

“There are strong trends on replacing the taxation of savings income with automatic exchanges of information. That would be the end of banking secrecy.”

But there is no danger to Switzerland in the short term, believes the minister, who also holds this year’s Swiss presidency. The country would negotiate with the EU on a taxation of savings income agreement and had approached Brussels a few days ago, Merz added.

The minister has recently returned from a visit to Germany, aimed at smoothing relations which had become strained over the issue of tax. A double taxation accord is only possible with German concessions, said Merz.

Concerning troubled Swiss banking giant UBS, Merz said he welcomed the bank’s move to raise $3.5 billion (SFr3.8 billion) of fresh capital. He added that the government still wanted to divest its stake in UBS as quickly as possible.

swissinfo.ch and agencies