Switzerland, Austria and Luxembourg all sought ways on Friday to fend off a global crackdown on tax evasion by offering concessions on bank secrecy. Andorra and Liechtenstein relaxed their strict bank secrecy rules on Thursday ahead of a meeting starting on Friday of finance ministers from the G20 group of developed and emerging countries that is expected to discuss tax havens. Austria, Switzerland and Luxembourg held talks through the night with the Organisation for Economic Cooperation and Development (OECD) which sets international standards for tax and data sharing and compiles a blacklist of non-compliers. Austria said it will do more to share information with other countries on suspected tax offenders although it would not otherwise lift its bank secrecy rules, Finance Minister Josef Proell told a hastily-convened news conference in Vienna. The Swiss and Luxembourg governments were also both planning news conferences on Friday after the three countries met last weekend. The OECD blacklist currently includes Liechtenstein, Andorra and Monaco, but France and Germany want others, including Switzerland, to be added. German Chancellor Angela Merkel said on Thursday she was optimistic tax havens would cooperate if the G20 threatened to blacklist them. Under a deal wtih the OECD, Austria will drop its objections to the organisation's Model Tax Convention after the OECD clarified that it only expected cooperation with foreign tax authorities if there was probable cause. “I can say today that the Austrian bank secrecy law can stay as it is,” Austria's Proell said. “However, we will start in bilateral tax agreements to ensure information is shared if there is the suspicion of tax offences.” The tax debate is crucial for the wealth management industry, which manages an estimated $7 trillion of wealth out of offshore centres around the globe. Switzerland is the world's biggest offshore financial centre, holding an estimated $2 trillion of global wealth held abroad. On Thursday, the OECD praised recent concessions by Singapore, Hong Kong, Andorra, the Isle of Man, Liechtenstein and the Cayman Islands. “Moves by a number of financial centres over recent weeks have given a welcome boost to efforts to promote transparency and exchange of information on tax matters,” OECD Secretary General Angel Gurria said in a statement. A study for British charity Oxfam on Friday showed that developing countries miss out on tax receipts worth more than the billions of dollars they receive in foreign aid because their own nationals put cash in offshore tax havens. They lose as much as $124 billion in taxes a year, more than their yearly $103 billion in foreign aid, the study showed. The upcoming G20 meeting has prompted Switzerland to turn to an expert panel for suggestions on how to ease international pressure by offering more cooperation on tax matters. Switzerland has also been under pressure to relax its strict bank secrecy rules from a US tax fraud investigation targeting its number one bank UBS, accused of helping rich Americans hide assets from the taxman in Swiss accounts. Swiss Finance Minister Hans-Rudolf Merz, who also currently holds the rotating Swiss presidency, will address the issue at a news conference on Friday and may signal the country is considering a relaxation of its bank secrecy laws. “The group of experts has made the recommendations to the government,” a finance ministry spokesman said. “Merz will make some comments today. It is clear that something will change.” Swiss Justice Minister Eveline Widmer-Schlumpf told Swiss television on Thursday the government was working on a review of bank secrecy rules and expected to present its ideas “shortly.”
