Vienna , 13 April 2012 Neue SeFekter: “The tax treaty with Switzerland is a major joint success”ite

“Our signature on the tax treaty with Switzerland today will secure tax revenues that are owed to Austria, and tax dodgers can legalise their offshore accounts. Our package of reforms is sound.”

Austrian Finance Minister Dr. Maria Fekter and her counterpart Eveline Widmer-Schlumpf have signed the tax treaty between Austria and Switzerland today in Bern (Friday, 13 April 2012). “We have been engaged in intense and constructive collaborative efforts with our Swiss colleagues in recent weeks, and at this point we would like to express our sincere appreciation to them. Our Swiss counterparts have been outstanding partners throughout this process. This is a great outcome for our negotiations and a major success”, the Austrian Finance Minister remarked in her comments at the time of signing the treaty.

The treaty is based on similar treaties that Switzerland has already concluded with Germany and the United Kingdom. It affects all natural persons domiciled in Austria with an account or portfolio at a Swiss bank. The Swiss banks will be withholding an amount of money from these accounts, constituting a tax on past unreported income. What this means is that Swiss banks will deduct a lump-sum amount of tax from their clients’ existing assets and/or capital gains and profits, and will transfer those amounts of tax to the Austrian tax authorities. The taxpayer’s old tax debts with respect to these unreported assets will be deemed paid and settled as of the time of the transfer. However, investors will have a right of election. An investor can elect either to proceed with the anonymous post hoc tax clawback taking the form of a one-time payment, or to disclose his or her assets to the Austrian Revenue.

The treaty also places capital gains arising on credit balances held by Austrian taxpayers in Switzerland on an equal footing with capital gains in Austria by means of an annual withholding tax.

“Legalise these assets once and for all”

“In any event, this treaty reduces the temptation for taxpayers to take money offshore, because it offers them the opportunity to legalise their unreported assets and capital gains once and for all. In addition, what it does is to make their money legal and enable them to use it freely. The advantages of the treaty to investors are thus clear and obvious”, Finance Minister Fekter said. Dr. Fekter’s firm rejoinder to those who fear that investors will close their accounts before the treaty enters into force: “Switzerland is giving an undertaking to the Austrian authorities that it will provide statistics on the main destination countries of clients who have closed accounts in Switzerland. Austria can and will take appropriate action with respect to those countries.”

“All claims of skeptics to the contrary, we will achieve our budget targets”

“The package of reforms we have adopted rests on solid foundations, as the treaty we have just concluded with Switzerland shows. These additional revenues will enable us to reach our budget targets and put Austria in an even stronger position”, Dr. Fekter concluded.