Switzerland says it will cooperate on cases of international tax evasion, amid pressure by major powers to crack down on so-called tax havens.The cabinet decided to conform with standards set by the Organisation for Economic Cooperation and Development (OECD) in an effort to avoid being put on a blacklist and facing possible sanctions.
The present distinction between fiscal fraud and fiscal evasion is to become obsolete, allowing the exchange of information with other countries in individual cases and based on legal requests.
"The government is ready to begin negotiations on revising double taxation agreements," said Finance Minister Hans-Rudolf Merz on Friday.
He added that banking secrecy would remain intact and that domestic bank clients would not be affected by the reform.
"The protection of personal privacy is firmly entrenched in the Swiss population," he said.
The government rejects any form of automatic exchange of information on private assets, according to Merz, who also holds the rotating post of Swiss president.
"We are not laying to rest Swiss banking secrecy. It is just another step in a reform."
He said he was convinced that the proposal would set a more solid legal basis and strengthen international recognition for Switzerland and its financial centre.
Friday's decision came as other alleged tax havens in Europe and Asia - including Austria, Luxembourg, Andorra as well as Singapore and Hong Kong - announced similar moves to fend of a global crackdown on tax cheats.
The world's major industrialised nations, known as the Group of 20, or G20, are to examine a proposal to blacklist Switzerland and other countries at a meeting in London at the beginning of April.
What's this? Direct democracy Direct democracy
Merz said a revision of the double taxation accords could take several years and Swiss voters might have the final say in a referendum.
"What he decided today can't be put into force overnight. Changes are subject to the rules of direct democracy," he said.
Switzerland has double taxation deals with more than 70 countries and concluded an accord with the European Union on the taxation of savings as well as customs fraud, which will also be subject to new negotiations.
Merz said the government had drawn up a list of demands for talks, including improved market access for international financial services, fair transitional solutions, respect for administrative assistance procedures and an individual treatment of suspected cases of tax avoidance.
The finance minister ruled out a retroactive application of the amended treaties, saying alleged tax dodgers cannot be held accountable for old violations.
"You can say this amounts to an amnesty," he said.
« We are not laying to rest Swiss banking secrecy. » Hans-Rudolf Merz, finance minister Diplomatic drive
Merz said he would broach the cabinet decision at a planned meeting in London on Saturday with representatives of member states of the International Monetary Fund.
It is not clear whether he will also meet his United States counterpart, Timothy Geithner, to discuss a legal row over suspected tax fraud and the disclosure of confidential details of wealthy American clients of the leading Swiss bank, UBS.
For her part, Swiss Foreign Minister Micheline Calmy-Rey will begin a tour of four neighbouring states next week.
Talks are scheduled in the principality of Liechtenstein, in France as well as in Italy and Germany at the end of the month.
Mixed reaction
The cabinet decision met with a mixed reaction by Switzerland's main political parties and organisations.
The Bankers Association said it supported the move. It also called for an end to all "improper international criticism of Switzerland and its legal system".
The centre-right Radical Party and the Christian Democrats gave guarded approval.
The centre-left Social Democrats described the decision as a step in the right direction, although it came at the last minute and only under pressure from outside. The Greens said the government offer for concessions did not go far enough.
For its part, the rightwing Swiss People's Party accused the government of "betraying citizens and bank clients" and giving in to "blackmail".
It announced it would defend the 75-year-old banking secrecy and force a nationwide vote.
On the international stage, France has welcomed the annoucements of Switzerland, Austria and Luxembourg to ease banking secrecy.
The EU is pleased by the Swiss decision according to a spokeswoman for the EU taxation commissioner, Láslo Kóvács.
An OECD statement, published on Thurday, praised recent concessions by financial centres to promote "transparency and exchange of information on tax matters".
swissinfo, Urs Geiser
