US tax authorities target evaders’ Swiss bank accounts

US tax authorities are probing whether a Swiss bank has helped Americans evade tax. Similarly, the Malaysian tax authorities should request data about the foreign bank accounts of Malaysians.

The US authorities are using a 1996 treaty to request client data from a Swiss bank. In response, Credit Suisse Group AG, reportedly (Bloomberg) told its American customers it would be giving confidential data to the Swiss tax authorities, who would then decide whether to reveal it to their American counterparts.

According to Bloomberg:

Switzerland, the world’s biggest center for offshore wealth, agreed in 2009 to meet international standards to avoid being blacklisted as a tax haven by the Organization for Economic Cooperation and Development. The London-based Tax Justice Network ranks Switzerland at the top of its 2011 financial secrecy index.

In February 2009, UBS AG (UBSN), the biggest Swiss bank, avoided criminal prosecution by paying $780 million, admitting it fostered tax evasion and giving the IRS data on more than 250 accounts to avoid criminal prosecution. It later turned over data on another 4,450 accounts and in October 2010, the U.S. dropped its criminal case against UBS.

The Justice Department is pursuing new criminal cases against Swiss banks after American customers provided information on them through a U.S. voluntary-disclosure program.

Isn’t it time that our Income Tax Department takes similar action to request data from European banks, not just Swiss but those of other countries as well?

By now though, those with ill-gotten or untaxed wealth will probably have realised that past confidence in Swiss banks’ secrecy is fast becoming a myth, and they would be thinking of alternative safe havens to stash their wealth away.