Tax and banking cause concern for expats

The governing body of the Swiss Abroad organisation meets twice a year Keystone

The Swiss abroad community has vowed to fight any discrimination by financial institutions amid a row with the United States over tax compliance. Expatriates are also worried about a tightening of French inheritance tax rules.

The Council of the Swiss Abroad called on the government to ensure that Swiss banks no longer refuse to open accounts or manage assets for Swiss expats. At a meeting in Bern on Saturday, it also stressed that bank fees must not be excessive.

The move comes as expats in the US or with dual American and Swiss nationality in particular face being shunned by Swiss banks.

The issue of tax compliance and a perceived discrimination of certain Swiss expatriate bank clients came to the fore in 2008 in the context of the global financial crisis. The Swiss Abroad Council has voted several resolutions over the years.

It argues that for a Swiss citizen living abroad who respects tax rules, it is inacceptable to be denied an account at reasonable conditions.

However, the government came out last December against a proposal by Roland Büchel, a senior member of the Swiss Abroad Council and parliamentarian, to guarantee Swiss expats access to the financial arm of the state-run Swiss Post.

It said any extension of PostFinance’s mandate to provide a guaranteed service for the Swiss Abroad was too complex and costly. Parliament still has to debate the proposal.

Büchel for his part called for renewed efforts to maintain pressure on the authorities and banks. “Constant dripping wears the stone,” he told the governing body of the Organisation of the Swiss Abroad (OSA).

Its president Jacques-Simon Eggly added that it was worthwhile pursuing the issue even if parliament were unwilling to follow suit.

Fatca

The council hopes a proposed deal on tax compliance with Washington, known as Foreign Account Tax Compliance Act (Fatca), could be a step towards resolving fiscal issues for 76,000-strong Swiss expat community in the US.

Nevertheless, the council urged the government to bear in mind the interests of Swiss expatriates in negotiations about international treaties.

“Fatca is just one example. Negotiations with France over inheritance tax leave no doubt that more problems will follow,” said Remo Gysin, a senior member of the Swiss Abroad Council.

The Swiss government signed the controversial Fatca deal with the US last month. Parliament is due to discuss it later this year and political parties on the right and left have already announced they will reject it.

Fatca obliges foreign banks to report offshore accounts held by US tax payers, including expats. The law is part of a policy by the US authorities to crack down on tax dodgers.

French concerns

The double taxation agreement with neighbouring France has recently become a controversial issue.

France has announced it wants to revise a 1953 accord in a bid to recover inheritance tax from its citizens living in Switzerland and force Swiss who own property in France to be taxed there.

The Swiss Abroad community as well as the cantons strongly oppose the amendments by Paris, saying it is discriminatory. Senior council member Jean-Paul Aeschlimann from France warned it could also set a precedent for other countries.

The Swiss government has been given until the end of June to negotiate a compromise before parliament is scheduled to discuss it.

There are about 186,000 Swiss citizens living in France – making it Switzerland’s largest expat community.

The agreement would also affect the estimated 2,000 French millionaires currently living in Switzerland.

Expat pressure groups

The Organisation of the Swiss Abroad (OSA) represents expatriates’ interests at home and outside Switzerland

The federal authorities recognise it as official voice of the expat community worldwide.

The Council of the Swiss Abroad is its governing body and currently has 129 members. It meets twice a year, in spring and in summer, just ahead of the annual Congress of the Swiss Abroad.

Limiting mandate

A proposal to limit the mandate of OSA presidents to two terms – or a maximum of eight years – prompted a lively debate on Saturday.

It was welcomed by many members of the council, but rejected by a majority of the leading committee.

Supporters argued the time was right to bring young blood into the OSA leadership, while opponents warned it was not easy to find suitable personalities to lead the organisation as OSA director Rudolf Wyder will step down later this year.

There was also criticism of the perceived attempt to undermine the position of the current president, who took up his post in 2007 and would not able to stand for re-election in August.

A final decision is expected in 2014.

Facts and figures

More than 715,000 Swiss citizens live abroad according to official data from December 2012.

Most of them are registered in neighbouring countries France, Germany and Italy.

There is also large Swiss community in North America.

About 150,000 Swiss expats have registered to take part in nationwide votes and in elections in Switzerland.