Credit Suisse, along with UBS and Julius Baer, have offered German clients an ultimatum: either provide evidence funds have been taxed or close their accounts.
Credit Suisse spokesman Marc Dosch told the Wall Street
Journal on Tuesday that the bank is cracking down on tax
evaders, and all account holders will need to provide documents
proving account funds have been taxed.
“We’re advising German customers to check their personal
situation and if necessary to clean it up,” Dosch told
Bloomberg.
“If that doesn’t happen we will have to terminate the client
relationship at some point,” said Dosch.
The policy applies to all German clients, who are being asked to
‘clean up’ their accounts.
The move by Credit Suisse relates to the German parliament’s
decision in December to reject a tax treaty between Germany and
Switzerland, which would have retroactively taxed all the money
Germans held in Swiss bank accounts ($12.9 billion), at a rate
between 21-41%, and then starting in 2013, their accounts would be
taxed at German rates. Under this condition, German tax evaders
would remain anonymous. The bill was expected to pass, but was
blocked by Germany’s upper chamber, saying the agreement didn’t go
‘far enough’, Spiegel reports.
After the legislation was blocked, Swiss banks began to watch
German clients' accounts much more meticiulously.
UBS, Switzerland's biggest bank by assets, is also asking German
clients to tidy up their accounts, a spokesperson confirmed on
Sunday.
“We support clients in regularizing their assets,” Christoph
Meier, a Zurich-based spokesman told Bloomberg.
Julius Baer is following suit. “We are encouraging our [German]
clients to carefully assess their fiscal duties and advising them
to seek professional advice,” Jan Vonder Muehll, a spokesman
said Tuesday.
Switzerland is an attractive destination for offshore wealth and is
trying to jettison its image as an offshore haven of illicit
wealth, largely in reaction to a crackdown by US and European
governments.
Swiss officials began to retreat from absolute banking secrecy
in 2008, after OECD countries threatened to put Switzerland on an
offshore 'black list'.
Tax evasion has become an increasingly hot political topic
worldwide, and last week the issue blew up on when the
International Consortium of Investigative Journalists leaked
offshore account information from the British Virgin Islands, the
Cook Islands, and other ‘havens’, even releasing identities.
Governments are now cracking down, or at least launching a public
campaign that depicts a crack down, on offshore tax-evasion.
The European Commission, along with the G20, have made it their
goal to oust secret banking regimes, but Austria and Luxembourg haven’t officially
signed on. The two countries are now under pressure from the EU
commission to make foreign depositor information available and
transparent.