Monday

23rd Jan 2017

France threatens Switzerland on tax evasion

  • Sarkozy in Cannes. Liechtenstein and Switzerland are the only countries on the OECD list which play a significant role in tax scams (Photo: diplomatie.gouv.fr)

French leader Nicolas Sarkozy has promised to make Switzerland into an international pariah unless it stops helping EU tax payers hide money. But EU countries have a poor track record of cracking down on high-level cheats.

The president told press after a G20 summit in Cannes on Friday (4 November): "We do not want any more tax havens. The message is very clear, countries which persist in being tax havens will be ostracized by the international community."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

He named and shamed Liechtenstein and Switzerland as being on an OECD list of 11 countries which do the least on tax co-operation.

The OECD, a Paris-based club of wealthy nations, earlier on Wednesday gave the full roll-call. The other nine are: Antigua and Barbuda, Barbados, Brunei, Botswana, Panama, Seychelles, Trinidad and Tobago, Uruguay and Vanuatu.

The Cannes summit saw G20 countries which had not already done so sign up to an OECD convention on cleaning up the sector. Its joint communique also threatened "countermeasures" against the 11 if they do not mend their ways.

OECD official Jeffrey Owens told EUobserver the G20 is making "significant progress." He said its initiatives have in recent years led to recovery of €14 billion in extra tax revenue.

One anti-tax-evasion NGO hailed Sarkozy's tough rhetoric.

"It may be a welcome step for the EU if France is prepared to use its political muscle against Switzerland," Markus Meinzer, from the Berlin office of the Tax Justice Network said.

He explained that EU finance ministers are currently negotiating a robust new law on tax evasion, the so-called revised Savings Taxation Directive. But Austria, Luxembourg and Italy are threatening to block the bill unless it covers Switzerland and UK overseas territories like the British Virgin Islands (BVI).

For his part, Nick Shaxson, the author of Treasure Islands, a book on how tax havens precipitated the financial crisis, said OECD-type lists do more harm than good.

"It's always been a mystery why some jurisdictions make the lists and others don't. In some ways, they are worse than useless because countries can point to them and say: 'Look at us. We're clean. We're not on the list," he told this website.

Shaxson noted the BVI is not on the list even though "vast numbers of corrupt, sleazy structures are run through the BVI."

G20 member the UK is also not included despite being one of the last countries in the world to tolerate "bearer shares" - a legal trick to hide the real owner of a company by saying that whoever holds the physical share documents in his hands at any given time is responsible.

Shaxson added that Greece is currently in talks with Switzerland on a tax repatriation deal on the model of a UK-Swiss deal signed this year.

Rich Greeks have reportedly stashed €200 billion in Switzerland. But Shaxson said that if the Greek deal contains the same loopholes as the British one, "the Greeks will be lucky if they get any more than €300 million out of it" in unpaid tax.

EU should raise own taxes, says report

A group chaired by former Italian PM and EU commissioner Mario Monti says Brexit should be used to create EU-level levies to depend less on member states contributions, and to abolish member states rebates in the EU budget.

Stakeholders' Highlights

  1. Caritas EuropaEU States to Join Pope Francis’s Appeal to Care for Migrant Children
  2. UNICEFNumber of Unaccompanied Children Arriving by sea to Italy Doubles in 2016
  3. Nordic Council of Ministers"Nordic Matters" Help Forge Closer Bonds Between the UK and the Nordic Region
  4. Computers, Privacy & Data ProtectionThe age of Intelligent Machines: join the Conference on 25-27 January 2017
  5. Martens CentreNo Better way to Lift Your Monday Blues Than to Gloss Over our Political Cartoons
  6. Dialogue PlatformThe Gulen Movement: An Islamic Response to Terror as a Global Challenge
  7. European Free AllianceMinority Rights and Autonomy are a European Normality
  8. Swedish EnterprisesHow to Create EU Competitiveness Post-Brexit? Seminar on January 24th
  9. European Jewish CongressSchulz to be Awarded the European Medal for Tolerance for his Stand Against Populism
  10. Nordic Council of Ministers"Adventures in Moominland" Kick Off Nordic Matters Festival in London
  11. PLATO15 Fully-Funded PhDs Across Europe on the Post-Crisis Legitimacy of the EU - Apply Now!
  12. Dialogue PlatformInterview: Fethullah Gulen Condemns Assassination of Russian Ambassador to Turkey