Wednesday

22nd May 2019

Italy and Switzerland sign deal to fight tax evasion

  • Estimates suggest around 70 percent of Italian money hidden abroad is in Switzerland. (Photo: EUobserver)

Italy and Switzerland on Monday (23 February) signed a deal to recuperate billions of euros of taxes from wealthy Italians who stash their undeclared assets in the Alpine nation.

The plan includes a partial amnesty for account holders who now have until 30 September to pro-actively declare their Swiss accounts to the tax authorities. The "voluntary disclosure procedure" incurs fewer sanctions and drops most criminal charges.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Swiss prosecutors searched the offices of the Geneva subsidiary of the HSBC (Photo: George Rex)

Estimates suggest around 70 percent of Italian money hidden abroad is in Switzerland - a non-EU member - with the schemes reportedly costing Italy’s national coffers around €90 billion annually in lost revenue.

"We have estimated additional revenues of just 1 euro in the budget law and the only thing I can say is that we will cash in more than that," Italy's economy minister Pier Carlo Padoan told reporters.

Bloomberg reports the undeclared Italian stash could amount to as much as €230 billion.

Swiss finance minister Eveline Widmer-Schlumpf said the deal would encourage account holders at Swiss banks "to come clean."

Switzerland is keen to improve its image on tax matters amid recent media reports that a Swiss branch of the UK banking giant HSBC was helping convicted criminals and other wealthy clients dupe tax authorities abroad.

The bank worked around a loophole in the 2003 EU-wide European savings directive (ESD) that requires authorities to impose a “withholding tax” on savings interest on offshore accounts.

Last week, Swiss prosecutors searched the offices of the Geneva-based subsidiary.

An international agreement on the automatic exchange of information on accounts also aims to help unravel years of Swiss bank secrecy laws by 2018.

The agreement includes a new global standard put in place by the finance ministers from the G20 of industrial nations and the Paris-based OECD.

But Switzerland has imposed extra conditions on the pact by agreeing to exchange only with countries with which they have “close political and economic ties”.

Transparency campaigners say such reservations work against developing countries because wealthy residents hide their fortunes abroad.

“It’s estimated that 33 percent of African and Middle East-owned assets are held offshore compared to 6 percent of European-owned assets,” according to a Christian Aid report out earlier this year.

The European commission, for its part, aims to make its proposal on the automatic exchange of cross border tax rulings before the summer.

The commission proposal would require a mandatory automatic exchange of information regarding advance cross border tax rulings and unilateral advance pricing arrangements among member states.

EU inks bank secrecy deal with Swiss

The EU and Switzerland inked a landmark deal on Wednesday aimed at clamping down on banking secrecy and preventing EU citizens from hiding undeclared cash in Swiss bank accounts.

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

News in Brief

  1. European brands 'breaking' chemical safety rules
  2. Report: Merkel was lobbied to accept EU top job
  3. May struggling to get Brexit deal passed at fourth vote
  4. German MPs show interest in 'Magnitsky' sanctions
  5. CoE: Rights violations in Hungary 'must be addressed'
  6. EU affairs ministers rubber-stamp new ban on plastics
  7. Private companies campaign to boost turnout in EU poll
  8. Austrian government chaos as far-right ministers step down

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Latest News

  1. Dutch MPs: EU sanctions should bear Magnitsky name
  2. Far-right hate speech flooded Facebook ahead of EU vote
  3. Key details on how Europeans will vote
  4. Voter turnout will decide Europe's fate
  5. Happy young Finns don't vote at EU elections
  6. MEPs' #MeToo pledge - only 12 EPP sign up
  7. Poland sends EU reform letter in heated election climate
  8. Populists 'could be the opposition parliament needs'

Join EUobserver

Support quality EU news

Join us