Tax transparency applied to all is Odier message from Swiss banks

Defending the interests of the Swiss banking industry has not been the easiest challenge in recent years, particularly when it comes to tax. The role has fallen for the last five years to Patrick Odier, chairman of the Swiss Bankers’ Association (SBA), which has 317 institutional members and about 18,500 individual members. He talks to Ralph Cunningham of International Tax Review about some of the group’s objectives for 2014 and what it hopes to achieve next year.

International Tax Review (ITR): What were the SBA’s objectives at the start of 2014 as far as the tax message you wanted to get across were concerned? Do you think you have achieved them?

Patrick Odier (PO): Switzerland and the SBA adopted a tax conformity strategy since 2009 already. The OECD standard on administrative assistance in tax matters is fully implemented, Switzerland has signed more than 40 double taxation agreements and there are two bilateral withholding tax agreements in place. The banks in Switzerland announced in 2013 that they will accept the automatic exchange of information once it has become an international standard. One of our most important messages throughout the year was – and is – that Swiss banks will allow for tax transparency but that a true level playing field is required. Also there have to be fair and practicable solutions for the implementation of the automatic exchange of information.

ITR: What was the biggest challenge regarding tax for the SBA in 2014?

PO: Certainly the rapidity with which dossiers are evolving. In this regard, it is very challenging to keep track and prepare the implementation of all the new tax regulations that emerge on an international level, while at the same time discussing national tax rules as well.

ITR: Have you been happy with the Swiss government’s statements and approach this year on tax issues such as exchange of information generally and the Common Reporting Standard in particular? Where do you think they could change?

PO: Yes, we are satisfied. We are working closely with the Swiss government to guarantee the best framework conditions and I believe firmly that such a close collaboration is a key success factor for Swiss banks.

ITR: Whenever issues such as the lack of tax transparency or effective exchange of information come up, Swiss banks seem to be in the firing line. How frustrating is this for you and your members?

PO: I think the world is starting to hear and understand the fact that Switzerland and its banks have accepted the automatic exchange of information. OECD executives themselves are praising Switzerland’s evolution and its contributions to the elaboration of the new standards.

ITR: Do you accept that Swiss banks have helped non-residents evade taxes in the past? What more can Switzerland and Swiss banks do more to show that this sort of activity is now in the past?

PO: The regulatory environment has radically changed and we have been working hard over the past five years to adapt to the new international standards. Tax compliance is a responsibility of the clients but we are helping those impacted to find an acceptable, definitive solution to the legacy issue, in particular through bilateral solutions or regularisation programmes. With regards to future taxation, I am sure that our banks will be able to provide the necessary data and procedures to effectively exchange information. I expect that other financial centres will also cope with that challenge.

ITR: What is the most / least rewarding part of your role as chairman of the SBA? What are the SBA’s objectives on tax for 2015?

PO: It’s not my reward but the one of all bank employees who dealt with tax issues over the last months to make sure that our clients can now go through this period of paradigm changes without worries. The unbroken increase of assets under management in Switzerland shows that we are on the right track. Maintaining the trust of our clients remains the top priority in 2015.

ITR: Will the recently-announced CTR III proposals have any particular impacts on Swiss banks? How?

PO: The CTR III proposals concern all companies with international activities. Banks in Switzerland are therefore not concerned specifically, but they will of course comply with the new rules once they are in place.