Switzerland and Singapore have agreed to automatically exchange financial information, part of a global crackdown on tax evasion.
Alexander Karrer, deputy state secretary at Switzerland’s State Secretariat for International Financial Matters, signed the agreement with Huey Min Chia-Tern, deputy commissioner of the Inland Revenue Authority of Singapore.
The Automatic Exchange of Information, or AEOI, is a multinational standard for sharing financial data, under the auspices of the Organisation for Economic Cooperation and Development. It was conceived on the back of concerns that wealthy individuals and corporations were able to move money into offshore centres to avoid paying taxes in their home jurisdiction.
Countries have gradually signed up to the standards – Indonesia and Switzerland signed a similar agreement earlier this month – which could have a major impact on the offshore wealth management industry.
A report by Oliver Wyman and Deutsche Bank, released in June, said that information disclosure rules and tax amnesties could lead to $1.1 trillion flowing out of offshore centres.
In a media release, the Swiss government said that: ‘Switzerland supports the efforts of the international community regarding tax transparency. However, for Switzerland it is essential that these efforts are supported by all and that the standards are correctly applied.’