UBS - Delays prevent Swiss from meeting deadlines agreed with the IRS
Under the terms of the administrative agreement agreed between Switzerland and the US in August 2009, criteria were established for proceeding with an administrative assistance request submitted by the Inland Revenue Service. This included a requirement that the Swiss Federal Tax Authority examines 4,450 UBS client dossiers and issue decisions in respect of releasing each dossier before the agreed deadline of 26th August 2010.
Procedural delays arising from a court decision in January 2010, which concluded that the agreement between the Swiss and US authorities was illegal, hampered the FTA's process, and in an attempt to head of the threat of a John Doe summons brought against UBS the Swiss government are now aiming to finalise the outstanding decisions before the year end.
Within Switzerland the controversy over the decision to cooperate with the US tax authorities, and the subsequent Parliamentary vote over-ruling the January court ruling, continues to divide opinion, with many people fearing that this case, the largest client information sharing exercise with a foreign tax authority, has caused irreparable harm to Switzerland's legendary banking secrecy. We'd like to think so, but only time will tell confirm whether banking secrecy is a thing of the past.