France Taking Tough Stance On Tax Evasion

The UK and Germany signed tax deals with Switzerland this summer whereby Swiss banks will deduct both retrospective and withholding taxes from accounts held by British and German taxp

The UK and Germany signed tax deals with Switzerland this summer whereby Swiss banks will deduct both retrospective and withholding taxes from accounts held by British and German taxpayers. The deals will provide much needed revenue for the UK and German governments but allow Switzerland to retain its prized banking secrecy.

The UK and Germany have been criticised in some quarters for taking the easy way out and not waiting for the EU to implement automatic exchange of information between all countries, including third countries like Switzerland. Some critics argue that the deals allow tax evaders to get away with their crime (albeit they will pay a hefty back tax).

France has reportedly ruled out the possibility of concluding a similar deal with Switzerland, for the moment at least. The government wants to uphold its principles by continuing to actively combat tax fraud and tax evasion. Le Monde reported that Paris turned down a Swiss offer because it would amount to giving up on its pursuit of tax evaders and contradicts its whole policy of recent years.

In the lead up to next year?s elections, President Sarkozy will also not want to be seen to be taking it easy on the rich.

It is estimated that French taxpayers have around ?75 billion of undeclared assets in Switzerland. Determined to track down and penalise tax evaders, the government still believes that automatic exchange of information is the best way forward.

It is essential that all your tax planning arrangements are fully compliant with French tax law.