The US tax authorities are upping the ante on the members of the Swiss Private Bankers Association, to amend their traditional business model of managing the undeclared wealth of foreigners, reported Financial Times.
The US government is suing UBS to recover thousands of names of American clients, who purportedly hoarded money in secret accounts against US tax laws.
As a result, UBS has entered into a double taxation treaty with the US tax authorities last week, Hans-Rudolf Merz, President of the Swiss Confederation and Federal Councillor of Finance, said in a statement. Mr. Merz added: “We agreed the double taxation treaty without compromises and there are background activities in the UBS case.”
In March this year, under pressure from G20, for the first time Switzerland agreed to loosen up its prized bank secrecy with other jurisdictions once bilateral tax treaties are ratified. With the US deal, Switzerland has agreed with six of the 12 new tax treaties it needs to comply with OECD standards. Further agreements have been reached with France, Denmark, Norway, Mexico and Luxembourg.
