Actions against Swiss banks part of global tax evasion crackdown

By Staff

Recent moves by European financial authorities to levy penalties against or request client information from Swiss banks is just the latest development in the international crackdown on cross-border tax evasion, Canadian tax lawyer David J. Rotfleisch tells

As Bloomberg reports, the Italian financial authorities sent a letter to Swiss lenders earlier this year, requesting a list of all their Italian units, data on local relationship managers, as well as an explanation of how Italian clients’ assets are managed. As the article notes, the motivation behind the crackdown is to ensure Swiss banks pay Italian taxes.

Shortly afterward, a French court ordered a large financial institution to pay a record fine of more than $5 billion for reportedly helping French clients to launder their assets. The fine is under appeal, says the article.

“The IRS, the U.S. tax authority, levied penalties against Swiss banks for assisting U.S. citizens in evading U.S. taxes and also required the banks to reveal details about Americans who are or were customers of the banks,” explains Rotfleisch, founding tax lawyer with Rotfleisch & Samulovitch Professional Corporation.

For example, he says, a few years ago one large Swiss bank had to pay USD $2.6 billion in fines to the U.S. Department of Justice due to the bank's role in aiding U.S. citizens to evade taxes.

In 2015, Rotfleisch says, the International Consortium of Investigative Journalists also uncovered documents that showed that the Swiss arm of an international bank actively aided as many as 2,000 taxpayers based in Canada to hide secret accounts and millions of dollars in taxes from the Canada Revenue Agency (CRA), alongside the accounts of many global taxpayers.

At the time, he said, some 260 taxpayers implicated in the leak came forward and made voluntary disclosures to the CRA, which clawed back more than $28 million in unpaid taxes and agreed not to prosecute for those amounts.

“Now European countries are following suit with France having successfully levied penalties against Swiss banks and with the Italian authorities attempting to do the same to obtain details of its citizens who are clients of the banks,” says Rotfleisch.

“This is part of the international crackdown on cross-border tax evasion and on institutions which facilitate it, particularly banks,” he adds.

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