Swiss Banking

[Amra]

Swiss Banking

First a bit of history for those who don't know. Someone correct me if I don't have my facts straight.

The Swiss banking system had been designed and used for ages as a place where worldwide clients could safely deposit monies with basically no questions asked. This secrecy was much desired by those who wanted to shelter their money for a number of reasons: to avoid paying higher taxes on it in their home country, just for the sake of privacy, and even more nefarious reasons related to "illegal" activities. If you didn't want someone knowing your business you used a Swiss bank.

But perhaps no longer.

GENEVA: Wealthy individuals and companies will no longer be able to hide their riches in Zurich's bank accounts now that Switzerland has bowed to international pressure to end the era of no-questions-asked banking.

Under pressure from the US and other troubled economies, the Swiss government announced on Friday that it would cooperate in international tax investigations, breaking with its long-standing tradition of protecting wealthy foreigners accused of hiding billions of dollars. Austria and Luxembourg also said they would help.

Against the background of the financial crisis, international cooperation has grown stronger, especially against tax crimes, Swiss president Hans-Rudolf Merz said.

The decision was a hard one for the Swiss, whose renowned discretion has long attracted the wealth of famous foreigners as well as refugees fleeing political or religious persecution.

Swiss banks hold an estimated $2 trillion of foreign money, and financial services account for about 12% of the country's GDP. According to the Boston Consulting Group, those holdings amount to one-fourth of the world's
foreign-owned assets.

The famed numbered accounts that do not bear the owner's name will still be available for clients willing to pay for added anonymity. But the government will now be able to demand account holders' identities in cases of suspected wrongdoing, and to share that information with foreign authorities.

Switzerland's move comes ahead of a meeting next month in which world powers will discuss stepping up their fight against tax cheats. The greatest pressure has been on Switzerland, which has been embroiled in a dispute with the US over wealthy Americans who have stashed their money in its biggest bank, UBS AG.

Seeking to avoid being blacklisted as uncooperative tax havens, other countries have also announced plans to open their books to foreign tax inspectors. Austria and Luxembourg said on Friday that they would offer more help on tax investigations. Over the past month, leaders have made similar promises in Singapore,

Liechtenstein, Bermuda, the British islands of Jersey and Guernsey, and tiny Andorra on the border between
France and Spain.

The move comes as a fillip to British Prime Minister Gordon Brown's attempts to clamp down on tax havens at next month's G20 meeting.

I am trying to wrap my head around whether this is a positive thing or not on a global scale. On one hand, curtailing certain deeds could be a good thing. On the other, I believe in a right to privacy about ones affairs.

Without a safe haven for money, countries could raise the roof on taxes (for just one example).

What do you think?

 

[Garbad_the_Weak]

Re: Swiss Banking

I believe in a right to privacy about ones affairs.

You do not have a right to conceal illegal activity.

 

[Johnny]

Re: Swiss Banking

Nobody pays extra money to put their money into swiss banks just for the comfort of privacy. It's to keep illegal dough away from the man.

 

[Tanooki]

Re: Swiss Banking

There's still the Cayman Islands, amirite?

 

[Amra]

Re: Swiss Banking

You do not have a right to conceal illegal activity.

You don't understand. What is illegal in one country may not be in another.

Nobody pays extra money to put their money into swiss banks just for the comfort of privacy. It's to keep illegal dough away from the man.

Really? You have talking to everyone who banks there? :scratchchin:

There's still the Cayman Islands, amirite?

LOL

Welcome to Cayman Banking Services

Due to the current financial climate, we recommend using Swiss Private Bank for offshore and private banking purposes.

Switzerland has no tax treaties with the United States andis regarded as the most secure and prestigious location in the world for Private Banking.

For information about opening a Swiss Bank Account, please complete our free consultation form.

 

[Johnny]

Re: Swiss Banking

You don't understand. What is illegal in one country may not be in another.

Great so store the money openly in "another" country then. Obviously if it's legal money there then any attempts from the US to seize your money will be rejected.

Really? You have talking to everyone who banks there? :scratchchin:

Yeah I did. It was around the time you went to Switzerland to have your eyes tinted blue.

 

[Garbad_the_Weak]

Re: Swiss Banking

Try Singapore:
http://www.escapeartist.com/taxhavens/singapore_offshore.html

No lie, they are outsourcing everything these days. =P

 

[trashX]

Re: Swiss Banking

if i understand the "bankgeheimnis" correctly not even the goverment can take a look at your cash right? the only time i could imagine not wanting the goverment to check my account was if i was getting it illegaly.
which brings me to the point: why did swiss banks ever need this protection?
unless of course they knew that it was only good for illegal purposes

 

[Garbad_the_Weak]

Re: Swiss Banking

You could say the same thing about doctor/lawyer privilege.

 

[KillerAim]

Re: Swiss Banking

trashx:

why did swiss banks ever need this protection?
unless of course they knew that it was only good for illegal purposes.

Because while tax evasion is illegal, tax avoidance is not. The pressure to get information on the customers of a bank from high-tax countries is nothing new. There has been a concerted effort to do this from the get-go. Tax havens encourage competition. If its people can easily move their money somewhere else, countries find it difficult to obtain more tax revenue if they raise their tax rates. There is documented evidence that shows that the average tax rates around the world have dropped with the increase in off-shore tax havens.

By the way, the definition of a what actually makes up a tax haven varies depending on the source. A pretty good definition is a place that exhibits the following two characteristics: "First, it will have at least some tax and/or regulatory policies that are market-friendly and those policies will be perceived to attract economic activity from other jurisdictions; second, it chooses, in at least some cases and within its right as a sovereign entity, not to help foreign governments tax economic activity inside its borders".

Two of the biggest tax havens in the world using this definition? New York and London.

 

[tarnok]

Re: Swiss Banking

I would just like to say I'm deeply concerned about the attitude of the thread so far. "You shouldn't worry about it if you have nothing to hide." is a terrible, terrible philosophy.

I won't speak on this situation particularly since I know next to nothing about banking, Swiss or otherwise, but in general you want it to be difficult for a government to find information about you because even seemingly innocuous information can be abused to your detriment and it will be abused. Even the controls we (I'm in America for reference) have right now do not stop abuses of private information, just make them less common. (To be clear here, I'm speaking of abuses by government officials, not typical criminals.)

The slippery slope is not a logical fallacy, it's the way the world works. This is not the last step before Big Brother sets up cameras in your house, but each step we allow makes it easier for our children to allow the next one.

 

[The Sandcat]

Re: Swiss Banking

when did Garbad get banned?what for?

 

[Johnny]

Re: Swiss Banking

when did Garbad get banned?what for?

Stop rewarding that stupid stunt of his.

 

[PFSS]

Re: Swiss Banking

You don't understand. What is illegal in one country may not be in another.

True, the problem comes when you're committing an illegal activity in a country where that activity is illegal then hiding the evidence in a country that won't ask questions.

The slippery slope is not a logical fallacy, it's the way the world works. This is not the last step before Big Brother sets up cameras in your house, but each step we allow makes it easier for our children to allow the next one.

There is another side to the slippery slope, in that the more privacy you grant regarding evidence of a persons earnings the more taxes are paid on an 'honor code' system. Though I realize that this is pretty much what the more libertarian among us effectively believe the system should be.

 

[Garbad_the_Weak]

Re: Swiss Banking

trashx:

Because while tax evasion is illegal, tax avoidance is not.

Actually, it is. You just can't realistically be prosecuted for it. But you are liable for tax on "any income from any source whatsoever" and are required to accurately report it.

 

[Amra]

Re: Swiss Banking

the only time i could imagine not wanting the goverment to check my account was if i was getting it illegaly.

So you are okay with the government coming into your domicile right now and having a look around through your things? The files on your computer? After all, if you have nothing illegal what could possibly go wrong?

 

[Johnny]

Re: Swiss Banking

So you are okay with the government coming into your domicile right now and having a look around through your things? The files on your computer? After all, if you have nothing illegal what could possibly go wrong?

Poor example. It would be uncomfortable but only because one would not be used to it and they wouldn't be doing it to other people. At the same time it would be many times more invasive than looking through your income as you gain and spend money.

A better example would be "Would you be okay with the government having access to how much money you make and how much you pay in taxes"

 

[trashX]

Re: Swiss Banking

So you are okay with the government coming into your domicile right now and having a look around through your things? The files on your computer? After all, if you have nothing illegal what could possibly go wrong?

what do the files on my computer have to do with the goverment? my income does on the otherhand. if they could check my files without my knowing(who knows maybe they do ) then it wouldnt bother me. if they keep the files for "legal" purposes that is, if they go across those boundrys and spread the information or abuse their right to access my files that would be something else. but then again that would be illegal. if everyone plays by the rules, noone gets hurt.

 

[SaroDarksbane]

Re: Swiss Banking

what do the files on my computer have to do with the goverment?

I think it was your attitude of "If you have nothing to hide, then what's the big deal?"

As previously mentioned, that kind of philosophy will get you into trouble.

 

[trashX]

Re: Swiss Banking

perhaps i should rephrase... if you can give me a valid reason why you want to look at my files, then by all means look. and yes, if you dont have anything to hide what IS the big deal? and why would it get me in trouble? proof that im a law abiding citzen or w/e gonna screw me over?