Talk about having a lot to deal with.
If any finance minister was at the centre of most of the controversial tax issues in 2013, mainly to do with the exchange of tax information, it was Eveline Widmer-Schlumpf of Switzerland. From January 16, when the Federal Council decided to enact the Tax Administrative Assistance Act dealing with administrative assistance under double taxation agreements up to November 29, when the council announced enhanced due diligence that Swiss banks have to follow to ensure they do not accept untaxed assets, and also gave authorisation to the first Swiss banks to cooperate with the US to settle their tax dispute, Widmer-Schlumpf and the Federal Department of Finance have had to deal with a range of issues under the intense gaze of the rest of the world.
Those issues have included double taxation agreements at various stages of development or enactment with Argentina, Australia, China and Hungary, signing its first tax information exchange agreement with the Isle of Man, the results of withholding tax agreements with Austria and the UK, which has seen money transferred from Switzerland to those countries, and the signing of a memorandum of understanding with the US over the implementation of the Foreign Account Tax Compliance Act. In this time, Widmer-Schlumpf has also represented Switzerland at meetings of the G20, as well as other international organisations.
Widmer-Schlumpf has tried to deflect criticism of Switzerland’s attitude to tax affairs by pointing the finger at other countries. After an OECD report to a G20 meeting of finance ministers in Washington, DC in April criticised Switzerland for deficiencies in how it implemented information exchange, Widmer-Schlumpf said her country was committed to global practices on the issue but that every country must do the same, noting that the identification of the beneficial owners of “Anglo-Saxon” trusts needed to improve as well.
Switzerland has been forced to join the rest of the world in becoming less secretive and more open to the idea of sharing tax information about the citizens of other jurisdictions with financial interests there. The impact of Widmer-Schlumpf’s management of these tricky issues in the future will be of keen interest to the rest of the world.
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