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Swiss law seeks to stem US tax evaders

Swiss tax law agreed on Monday targets US tax evaders using the alpine country as haven.

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A new tax law proposal passed by the Swiss parliament seeks to end tax evasion by US citizens. (Fabrice Coffrini/AFP/Getty Images)

Switzerland’s lower house has passed an amendment Monday to a taxation agreement with the US, in an attempt to settle an ongoing dispute over tax evaders, said Reuters.

The amendment, according to Money News, allows so-called group requests in cases of suspected fraud or tax evasion by American citizens holding bank accounts in Switzerland.

The law comes during a US probe into 11 Swiss banks including Credit Suisse, which was indicted by a US federal judge last year over tax evasion because of which the company is expected to pay fines of up to $1 billion and release information about US customers.

As a part of the deal, Swiss banks are required to ensure that foreign clients are tax-compliant in their home countries.

This deal will only apply to US authorities, however, according to Tax News.

The law is meant to clarify just how Swtizerland  would hand over data on Americans, for instance, allowing the country to give data to US tax authorities even if they cannot identify alleged tax evaders by name or bank account number.

Switzerland's Finance Minister, Eveline Widmer-Schlumpf, warned the lower house before the vote, according to Money News: “What we are deciding on is not any kind of fishing expedition. There must be clear evidence of wrongdoing by the client” and by the banks involved."

It is a move that represented a weakening of Switzerland's status as a secret tax haven that has allowed the tiny, landlocked nation to develop one of the world's largest finance industries.

The vote, which passed with 110 votes to 56 votes and 14 abstentions, had already been passed by Switzerland's upper house in December.

http://www.globalpost.com/dispatch/news/business-tech/120305/swiss-law-tax