14. 02. 12. - 16:19

Austria approaches Switzerland to snare tax fugitives

The Austrian government has started talks with Swiss officials about an anti-tax evasion agreement.

Representatives of the Austrian finance ministry said today (Tues) negotiations with Swiss government officials were ongoing. However, a spokesman for the Swiss state secretary for economy denied that talks had already taken place. The Austrian finance ministry said the contradicting statements were based on disagreement about whether the talks could be considered as negotiations focusing on details about a planned settlement to tax Austrians who tried to stash their assets tax-free in Switzerland.

Austrian People’s Party (ÖVP) Finance Minister Maria Fekter said Austrians may hoard up to 20 billion Euros in the neighbouring country which is famous for its strict banking secrecy. The Austrian government coalition of Social Democrats (SPÖ) and Fekter’s faction intends to follow the example of Germany and crack down on these capital reserves by coming to an agreement with Switzerland from which both states would benefit financially.

SPÖ Chancellor Werner Faymann and ÖVP Vice Chancellor and Foreign Affairs Minister Michael Spindelegger said last Friday the plan was to rake in one billion Euros in the next five years thanks to a possible tax agreement with Switzerland. SPÖ and ÖVP agreed on the measure as part of their latest savings package – which features attempts to improve the efficiency of the public sector but also several tax hikes.

Columnists and political analysts criticised the coalition for considering the potential income in its budget for the coming years despite great uncertainty about whether an agreement with Switzerland could be achieved. SPÖ Financial Affairs Secretary Andreas Schieder said today the figures were carefully established and based on calculations taking the Swiss-German settlement into account. He underlined that talks with Swiss government officials had already started. The state secretary told Die Presse that the Austrian SPÖ-ÖVP government’s estimations were realistic.

The government opted for a similar strategy regarding a tax on financial transactions. No European country has a general levy on transactions on the stock market yet but France is planning to introduce such a measure in around half a year. Experts think that traders would not have any difficulties in finding ways to evade the charge.

Faymann and Spindelegger are in support of a continental tax on financial transactions. The government hopes for takings of half a billion Euros a year in a few years’ time. Fekter said at the weekend that the sum was "not a fantasy figure" but carefully estimated based on possible success in the Austrian campaign for such a levy in the European Union (EU).

Schieder said today that "massive pressure" by the Faymann administration helped to enable a turnaround in the European Commission (EC) in this concern. EC President Jose Manuel Barroso recently declared his support for the measure and revealed that the EC planned to introduce it in the foreseeable future.

"We will not get tired of calling for an implementation across Europe," Schieder told Die Presse. The financial affairs secretary said a "coalition of countries willing to team up" could lead the way if the project of creating a tax on financial transactions across the whole of Europe failed.