Switzerland deal to help Italy combat tax evasion

Davos in Switzerland Image copyright World Economic Forum
Image caption Switzerland is the hiding place of choice for Italian cash

Italy and Switzerland have signed a deal to share information in a bid to tackle tax evasion.

The deal offers a partial tax amnesty to Italians that have hidden cash in Switzerland.

They will have until 30 September to declare their Swiss bank accounts through a "voluntary disclosure procedure."

In return, they will be given more lenient fines and most criminal charges will be dropped.

Around 70% of the cash that Italians have hidden abroad is in Switzerland, reportedly costing Italy €90 billion ($100bn) a year.

Italy is keen to bolster its government revenues as stagnant growth has put pressure on the country's finances.

In September, the government increased its 2015 deficit target from 2.2% to 2.9% of GDP, just below the 3% threshold set by the EU.

The deal comes as bank secrecy and tax evasion takes centre stage in Europe. HSBC has been accused of helping people evade UK tax using hidden HSBC accounts in Geneva.

Greater financial disclosure measures are likely to be introduced in Europe. Switzerland has agreed to sign a multilateral agreement to share tax information with other governments by 2018.

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