Does Anyone feel like Bailing

[classicman]

Bank secrecy moves may force wealthy back onshore

Wealthy people who have stashed cash in undeclared accounts in Switzerland and other offshore centers may now seek ways to legitimize their money after Berne and other tax haven governments relaxed bank secrecy laws.

In landmark statements, bank secrecy strongholds Switzerland, Luxembourg and Austria offered on Friday more cooperation on tax evasion than ever before to avoid being blacklisted by G20 countries as unco-operative tax havens.

The decision, which comes on the heels of similar moves in other offshore centers, will not eliminate the principles of banking secrecy that have allowed the $7-trillion offshore industry to thrive, and the countries will offer help only on limited cases of suspected tax evasion.

"It is not an open door policy. It is an easing of access to information in respect to tax crime," Swiss President and Finance Minister Hans-Rudolf Merz said on Friday.

But Berne is already looking for a transitory solution to help its client come onshore, and did not rule out the option of negotiating tax amnesties with other jurisdictions.

"This is not a fantasy. It is more than appropriate to talk about amnesties," Merz told a news conference.

Liechtenstein, a tiny Alpine tax haven that also committed to more tax transparency on Thursday, has said it wants a legal solution to help its clients bring undeclared money onshore to stem the massive client withdrawals its banks have been suffering since a tax spat with Germany.

"Tax amnesties are the most attractive solution for banks and bank clients to get out of a problem," said Dirk Hoffmann-Becking, an analyst with Bernstein Research, who says the changes on the tax arena are coming at a faster pace that the industry originally anticipated.

"But it's not in Switzerland's hands to determine them."

There are a lot of people who have inherited undeclared money from their parents," he added. "The younger generations wants to use the money and they cannot do it if the money is not clean."

Swiss tax lawyers say it has become more and more difficult for holders of undeclared accounts to benefit from these as the money cannot be moved and can only be spent in Switzerland.

"This is dead money. It is money that burns under your fingers," said a tax lawyer who declined to be named.

Very interesting.