Villiger - no question of abandoning banking secrecy

Villiger (right) and Grasser signing the protocol in Zurich Keystone

The finance minister, Kaspar Villiger, has stressed that Switzerland's banking secrecy laws are not up for discussion. His comments came during a meeting with his Austrian counterpart, Karl-Heinz Grasser, in Zurich.

This content was published on July 21, 2000 minutes

The two men were in the Swiss city to sign a protocol on double taxation between the two countries.

They also discussed banking secrecy laws - which exist in both countries - and said the protocol represented a "coalition to maintain banking secrecy for the benefit of the investor."

The protocol abolishes the five per cent tax at source on dividends paid out to shareholders with at least a 20 per cent stake in a company.

For those with a stake of less than 20 per cent, the tax will be increased to 15 per cent, conforming with the regulations laid down by the Organisation for Co-operation and Development in Europe.

The finance ministry said the changes would make Switzerland more attractive to international businesses as they would benefit from the same reduction in the tax burden that already exists within the European Union.

Villiger repeated there was no question of Switzerland relinquishing its banking secrecy, although he said Switzerland understood that the EU wanted to clarify the tax on interest earned.

Grasser said that keeping banking secrecy did not represent a problem for his country, as Austria itself had both a system of tax at source and banking secrecy.

In June, EU countries concluded a draft to deal on the taxation of cross-border savings. Under the proposals, EU members would be able to exchange information on non-resident account holders to reduce tax evasion and help combat fraud and organised crime.

The deal is dependent on the EU persuading third countries, such as Switzerland, to adopt similar measures. Switzerland is not a member of the EU.

The agreement has been seen as a potential threat to Switzerland's banking secrecy, because close economic ties between Berne and Brussels are thought to give the EU considerable leverage.

swissinfo with agencies

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