Switzerland and U.S. Sign Treaty to Share Tax Information

Switzerland and the United States have signed a treaty to increase the amount of tax information they share to help crack down on tax evasion, Swiss officials said Wednesday.

The agreement follows a model set out by the Paris-based Organization for Economic Co-operation and Development designed to make it harder for taxpayers to hide money in offshore tax havens.

U.S. tax authorities will be able to request information on Americans suspected of concealing Swiss bank accounts, the Swiss Finance Ministry said.

The treaty forbids so-called 'fishing expeditions,' meaning U.S. authorities have to provide specific details on the person they are seeking further information about and can't simply ask for wholesale lists of Americans with Swiss accounts, the ministry said.

The agreement, which comes into force immediately, won't be retroactive.

Washington has been aggressively pursuing suspected tax evaders in Switzerland, the world's biggest offshore banking center.

In August, the U.S. and Switzerland resolved a court case in which Swiss banking giant UBS AG agreed to turn over details on 4,450 accounts suspected of holding undeclared assets from American customers.

The case against UBS, as well as pressure from other OECD countries such as France, Britain and Germany, prompted Switzerland earlier this year to agree to soften its stance on banking secrecy for foreigners.

Since March, Switzerland has signed 11 tax information exchange agreements, one short of the number required by OECD for it to be removed from a 'gray list' of uncooperative tax havens.

Switzerland has also signed agreements with Denmark, Luxembourg, France, Norway, Austria, Britain, Mexico, Finland, Faeroe Islands and Spain and the government has authorized the signing of a 12th with Qatar.