Commenting on the significant tax agreement signed yesterday between Switzerland and the UK, Paul Harrison, tax partner and head of tax investigations at KPMG in the UK, said: “This agreement heralds a new era of co-operation between the UK and Swiss tax authorities and sends a very clear message that the abuse of banking secrecy to evade tax will not be tolerated.
“However the banks are likely to be concerned at the burden this will place on them at a time of ever increasing regulation, not least as the agreement says that they will also be subject to audit by a joint commission on their application of the agreement provisions. Interestingly, the agreement also provides for tax liabilities to fall on the bank if they are found to be assisting their customers artificially avoid the new withholding taxes.
“Whilst the agreement is very detailed some key questions still remain and we expect much debate before the provisions become final following parliamentary scrutiny in both jurisdictions. We welcome HMRC’s effort to engage in discussion with the tax profession in this regard, as banks and their customers are likely to need help dealing with the implications.
“Overall, this agreement represents a significant attempt to encourage customers to disclose their offshore assets to the authorities. Whilst this is clearly desirable if it stamps out deliberate tax evasion, it does create a significant compliance burden on the banks and it is also likely to require even compliant taxpayers to review their affairs”
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Notes to editor:
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Email: monica.fiumara@kpmg.co.uk
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
