Hundreds of billions of dollars could be moved out of Swiss banks as clients attempt to flee a coordinated crackdown on tax evasion, UBS’s Jürg Zeltner told magazine Schweizer Bank on Sept. 17. The crackdown will likely cost Switzerland its tax-haven status.
The head of the UBS wealth management unit predicted that his bank will lose about 12 billion to 30 billion Swiss francs (US$12.8 billion to 31.9 billion) of the 783 billion francs in assets under management for wealthy clients. “As a consequence of the realignment of the financial center and the planned withholding tax, we assume that a total of hundreds of billions of francs will flow out of Switzerland,” he told Schweizer Bank.
Credit Suisse, the other big player in wealth management, estimates it will lose over $37 billion over the next few years as European clients withdraw their money. German business consultants ZEB estimate that out of the total 2.8 trillion francs ($3 trillion) that the roughly 300 Swiss banks have under management, 800 billion francs could be untaxed funds from European citizens. ZEB predicts that 200 billion of those funds could be withdrawn due to several tax treaties and investigative breakthroughs.
European Tax Treaties Plan Automatic Withholding Tax
Switzerland is likely to lose its tax-haven status because of several breakthroughs European countries and the United States have made in prosecuting tax evaders.
Germany was able to procure the names of tax evaders by buying the data from bank employees for a fee ranging in the low single digit millions. A compact disc with the names of 35,000 tax evaders obtained by the state of Lower Saxony in 2010 is expected to yield 1.8 billion euros in repayments ($2.35 billion), according to German magazine Der Spiegel. In addition, many tax evaders have self-indicted themselves, hoping that they will get away with a fine and not be criminally prosecuted.
