The end to traditional Swiss banking secrecy

The impact of the US government’s investigations into Swiss banks that allegedly helped US citizens evade tax, repeated instances of whistle blowers, and tax agreements such as those signed with the UK and Austria in recent years, have hurried Switzerland towards a new era of transparency. Agreeing to automatically exchange information with other countries is the final step.

By signing up to OECD’s common reporting standard, Switzerland will signal the end of traditional Swiss banking secrecy. The Swiss Banking Association called for reasonable approaches to dealing with past non-compliance, perhaps with the UK’s tax disclosure facilities in mind as acceptable models.

Those account holders for whom confidentiality means everything will exit Switzerland and take their money to those regimes which are lagging behind tax transparency developments. Yet with many offshore centres already signed up to the automatic information exchange agreement and Switzerland now on board, pressure is likely to ramp up for those remaining to sign up to transparency measures.