Swiss banks coming clean to protect turf

pub_date:They address tax evasion issues amid rising competition from Singapore, HKTHE Swiss banking industry has decided on a "clean money strategy" to straddle demands from nations anxious to counter tax evasion with competition from Singapore, Hong Kong and other financial centres.自存倉According to the Swiss Banking Association (SBA), "only taxed assets are to be managed in the Swiss financial centre". The first purpose of this strategy is to deal with the tax-related problems of the past. This is being achieved by means of bilateral agreements on withholding tax."The agreements provide for regularisation of the untaxed assets that are already held with banks in Switzerland, and guarantees protection of clients' privacy," the SBA states.Agreements have been signed with Germany, the UK and Austria and negotiations continue with the US.The total potential amount of foreign assets in Switzerland, allegedly evading tax, has not been disclosed, but it could be huge. Total assets under management in Switzerland amounted to 5.3 trillion Swiss francs (S$7.4 trillion), of which the share of foreign clients was 2.7 trillion Swiss francs, estimate the SBA and Swiss National Bank.Swiss banks' share of cross-border banking is 27 per cent of the global total, estimates the Boston Consulting Group (BCG).In the past few years Swiss bankers have worried that agreements with developed nation tax investigators would drive money to offshore centres and growing financial hubs such as Singapore. The "clean money" strategy is thus a move to stop Switzerland's market share of global offshore wealth from shrinking.BCG predicts that Switzerland's market share will decline to 25 per cent in five years. In contrast, private banks based in Singapore and Hong Kong are forecast to capture an ever-larger share of global wealth held offshore as the ranks of the super rich in Asia grow faster than elsewhere in the world.Offshore wealth rose by 6.1 pe迷你倉新蒲崗 cent globally to US$8.5 trillion in 2012, reckons a BCG study.High net worth people will seek to protect their wealth by depositing it with private bankers who have proven market expertise and in countries which are politically stable and have low relative taxation.BCG predicts that in the next five years, the total will rise to US$11.2 trillion and the Asia-Pacific super rich will generate another US$1.4 trillion, compared to US$0.5 trillion from Latin America and US$0.5 trillion from the Middle East and Africa.Under that forecast, Singapore's share of global offshore wealth will grow to 12 per cent by 2017 versus 10 per cent currently, while Hong Kong's share will grow to 6 per cent from 5 per cent. Swiss banks, alongside other foreign bank competitors, have thus expanded operations in Asia.Referring to the agreements signed with Germany, the UK and Austria, the SBA said: "These agreements are the only way in which the issue of untaxed money that found its way into Switzerland in the past can be approached systematically and not on a case-by-case basis."The problem will not be solved by the often cited automatic exchange of information, nor by clients submitting a "tax honesty declaration" or "self-declaration", which is a particularly popular idea among politicians.Instead, the withholding tax model must ensure that foreign clients in Switzerland are taxed in exactly the same way as they would be in their country of domicile, while still safeguarding their privacy. Double taxation accords will also be brought into line with global standards.The SBA insists that a Swiss banks' code of conduct regarding due diligence prohibits active assistance in tax evasion and money laundering."Banks must not provide any assistance to their clients in carrying out acts aimed at deceiving Swiss or foreign authorities, particularly tax authorities, by means of incomplete or otherwise misleading attestations," state SBA officials.迷你倉出租