According to Matthew Saltmarsh writing in the Thursday, April 21, 2011 New York Times — Switzerland will probably sign new treaties by the summer with Germany and Britain under which their citizens will pay taxes on most of their undeclared assets in Swiss banks. It appears that France and Italy will sign similar treaties with Switzerland. The arrangements will likely involve payment of a flat rate withholding tax, which will be deducted by the Swiss bank. Client anonymity would be preserved. But citizens of European countries like France, Great Britain and Germany will no longer be able to completely avoid taxes on undeclared assets in Swiss bank accounts.
While the proposals would preserve Switzerland’s banking secrecy, the New York Times reports that they are likely to accelerate a shift away from banks relying on undeclared assets. These changes could result in more consolidation and down-sizing among Swiss private banks.
It is very important to keep in mind that Swiss banks can offer more than secrecy. The country has traditionally offered political and economic stability; a strong currency; and quite a bit of banking and investment expertise. Moreover, from a pure asset protection standpoint, protecting one’s assets does not equal hiding those assets. In the United States, the best asset protection plans essentially involve holding assets where they are not hidden, but having them lawfully titled in such a way that they are better protected from creditors.
Holding assets in a Swiss account could be a very legitimate part of a lawful and reasonable asset protection plan for a United States citizen — as long as there is no attempt to unlawfully avoid applicable U.S. taxes.