Swiss set to tax some British accounts

Swiss finance officials agreed on Monday to negotiate with British authorities looking for citizens with taxable assets stashed in secret Swiss accounts.

Finance Minister Hans-Rudolf Merz and British tax secretary David Gauke established guidelines for the negotiations, which will include establishing a new withholding tax on certain British deposits. There will be no automatic exchanges of information.

Merz’s office said in a statement that the negotiations would preserve Swiss banking secrecy laws because British authorities would have to request assistance with tax-related investigations on a case-by-case basis.

After the meeting in London, Merz told reporters that Switzerland was still negotiating the withholding tax rate but that it would vary from country to country and be similar to the rates set in the foreign depositor’s home country.

In parallel talks, Germany has also agreed in principle to Switzerland introducing a withholding tax on Germans’ assets and to finding a retroactive solution for billions of euros of untaxed money without providing account holders’ details.

Patrick Odier, chairman of the Swiss Bankers Association, told Reuters the deals could be a blueprint for others.

“It may very well be the case that some other countries may be interested and attracted to what now seems to be an agreeable solution for at least two major countries in Europe,” he said.

The talks with Britain are due to start in early 2011 and will also include Swiss demands for Swiss banks to have better access to the British market. The terms of negotiations with Germany are due to be signed on Thursday.