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Swiss tax haven is over

Published time: February 01, 2013 09:03
Edited time: February 01, 2013 13:03
Swiss bank UBS (AFP Photo / Carl Court)

Swiss bank UBS (AFP Photo / Carl Court)

Switzerland will now assist international tax authorities in disclosing information on bank accounts held by foreigners who avoid taxation at home.

Joint efforts by the EU, the US and number of other countries have led to Switzerland introducing new banking laws on February 1. The new regulation now allows foreign tax services to send group requests for bank account information of their citizens. Banks, nominal account holders, agents or trust managers will now be obliged to provide the information.

These requests can take a number of forms, partner at Paragon Advice Group, Aleksandr Zakharov told Vedomosti daily. A tax authority can request data on a group of people united by common criteria, though it's still has to be seen how it will work – so-called "fishing" requests are strictly prohibited, Zakharov explained. Also international tax services, apart from the American, will be able to collect data relevant from January 1, 2013, he added.

Information, collected by Russian tax authorities will not only cause troubles for Russians holding funds in Swiss banks, but can also toughen the procedure of checking the source of the money, when placing them in Switzerland, Zakharov believes.

Some express doubts about avoiding Russian taxation in the first place. "I don't quite see the reason for avoiding the Russian fiscal system, when it's one of the best in world when it comes to income tax," head of the Russian representative office of Diamond Age Investemnt, Slava Rabinovich told Business FM. "Few countries in the world ask its citizens for 13% income tax. So potential punishment and problems are too high compared to such a low tax and there is simply no point of hiding from taxes, have you accounts on Switzerland, Monaco or Singapore?"

A major part of Russian oil is traded through Russian oil 'daughter' companies, most of which are registered in Geneva. They include Gunvor, Rosneft, TNK-BP and Lukoil.