Switzerland and Singapore have both agreed to share data and tax information under a groundbreaking new treaty signed by some 47 nations worldwide.
“It’s clearly the end of bank secrecy abused for tax purposes,” OECD tax director Pascal Saint-Amans told reporters in Paris on Tuesday
Switzerland and Singapore are renowned for their status as massive offshore financial centers. Their signing up is considered to be a giant step in an escalating battle against international tax evasion.
Switzerland has some $2 trillion in assets and more than 300 private banks. However, Singapore is a close second and a study released last year showed that experts believe that the country will soon overtake Switzerland as regulations increase in severity.
“It means that governments can really assess the tax owed by people who thought they could hide in other jurisdictions,” Saint-Amans stated.
All financial information is to be shared by signatories. Among the details to be distributed are taxpayers’ bank balances, dividends, interest income and sales proceeds used to calculate capital gains tax, according to Reuters. The Tuesday OECD deal established a common standard for the details’ exchange.
Last year, Switzerland indicated its preparedness to cooperate with the US over American tax evaders holding offshore accounts in Switzerland. In December, the Swiss regional lender Valiant Bank agreed to a US voluntary disclosure program aimed at divulging information on evaders.
The US authorities have been chasing Swiss lenders since they forced UBS, the country’s biggest bank, to pay $780 million for its role in contributing to tax evasion in 2009.
The other banks which came under suspicion were EFG International, St. Gallen Kantonalbank, which owns private banks Hyposwiss, Linth Bank and Banque Cantonale Vaudoise.