New withholding tax proposed by Swiss banks

Banking institutions from Switzerland - which manage 27 per cent of the world’s private wealth - have called for a withholding tax on earnings generated by foreign affluence.

The Swiss Bankers Association (SBA) made the suggestion, which, it claims, goes further than current European Union (EU) legislation.

It said the tax should be levied at the source on interest accumulated on savings, dividends, capital gains and investment income, held by citizens of the EU.

This could potentially raise billions for foreign governments, it was claimed by SBA chief executive Urs Roth.

Furthermore, it is thought the move would help to secure bank secrecy – something it perceives as necessary in the current climate of plateauing client inflows.

Speaking at a press conference, Mr Roth told journalists: ’The model would generate tax revenues while respecting the privacy of bank clients and it would represent an efficient alternative to a system of automatic information exchange.’

Despite the nation’s private banking secrecy, earlier this year UBS bank handed over the details of American clients to the US government which suspected some citizens were evading tax by saving money in Swiss accounts.
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