Switzerland, Singapore join clampdown on bank secrecy

The Strait Times,  May 6, 2014

PARIS (REUTERS) – Switzerland and Singapore joined on Tuesday the growing ranks of countries agreeing to share tax information in a major breakthrough against bank secrecy, the OECD said.

Under the pledge signed by a total 47 countries, all financial information will be shared between governments, including taxpayers’ bank balance, dividends, interest income and sales proceeds used to calculate capital gains tax.

“It’s clearly the end of bank secrecy abused for tax purposes,” OECD tax director Pascal Saint-Amans told journalists at a meeting held by the international think tank in Paris.

“It means that governments can really assess the tax owed by people who thought they could hide in other jurisdictions.”

While most of the signatories had already committed to sharing tax information on an automatic basis, the fact that Switzerland and Singapore have now also signed up is a big step in a fight against tax evasion that governments have intensified since the global financial crisis.

Facing mounting pressure to dismantle a cherished culture of banking secrecy, some of Switzerland’s 300-plus private banks had already signalled last year their readiness to work with U.S. officials to crack down on wealthy Americans.

Switzerland is still the world’s biggest offshore financial centre. But Singapore is breathing down its neck and a 2013 study showed finance professionals see it soon overtaking the Alpine nation amid a global tax crackdown and tighter regulation.

With Tuesday’s deal, the OECD devised a common standard to simplify the exchange of financial details, which its 34 members and the 13 other countries agreed to adopt.

Financial companies will also be required to identify the ultimate beneficiaries of shell companies, trusts and similar legal arrangements that at present can be used to evade taxes.

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