Swiss banks to focus on 'taxed assets' from foreign clients

NEW DELHI: Facing criticism for giving safe haven to assets hoarded by tax defaulters from India and other countries, Swiss banks have decided to focus on keeping "taxed assets" in their lockers.

At the same time, they have rejected any responsibility for any of their clients being dishonest in the tax matters.

"Swiss banks will in future focus on the acquisition and management of taxed assets," the influential Swiss Bankers Association (SBA) has said.

In a recent paper detailing its future strategies for the Swiss banking industry, the grouping, however, said it fundamentally rejects "any duty of inspection and any associated attempt to make bankers responsible for the tax honesty of their clients".

The paper was prepared in close consultation with the Swiss government.

Swiss banks, known for their secrecy, have come under increasing pressure in the wake of G-20 leaders pledging to crackdown on tax havens worldwide.

Meanwhile, the issue of Indians allegedly stashing away black money in Swiss banks had become a major talking point in the run up to the general elections in 2008.

Last August, the SBA had said that India is not welcome on a name-fishing expedition.

Since then, India and Switzerland have completed renegotiations to amend their bilateral tax treaty, that would allow the Indian authorities to seek details of secret Swiss accounts held by its citizens.

"This (keeping taxed assets with them) will be achieved by adopting the global OECD 26 standard (clause), which provides for administrative assistance on a case-by-case basis for all tax offences," the paper noted.

The Organisation for Economic Cooperation and Development (OECD), a grouping of mostly rich nations, sets the international tax standards.

Moreover, SBA asserted that the distinction between tax fraud and tax evasion would therefore be removed for foreign business.

"In order to regulate the implementation of international administrative assistance and ensure legal certainty, a law on administrative assistance must be brought into effect quickly," it added.

Earlier this month, Swiss Ambassador Philippe Welti said the release of data on secret bank accounts would be in accordance with the provisions of the taxation treaty with India.