US Tax Spat Returns UBS To Spotlight As Swiss, US Seek Pact
By Katharina Bart, The Wall Street Journal
UBS AG (UBS) was again at the center of relations between Switzerland and the U.S. Tuesday as the two countries launched talks aimed at agreeing a double-tax treaty which experts say could have implications for the Swiss bank’s ongoing legal battle with the Internal Revenue Service.
Switzerland wants a speedy resolution to the talks after inking double-taxation agreements with several European countries in recent weeks, a spokeswoman for the finance department said Tuesday.
At the same time, the IRS is continuing with its demands for access to data on more than 50,000 UBS clients through the civil court in a move that strikes at the heart of Switzerland’s traditional banking secrecy.
But even if the IRS succeeds in its demands, UBS is likely to continue to refuse to hand over data because doing so would violate Swiss law. Therefore, if the court case persists, the Swiss government is expected to seek a political solution that falls back on the terms of the planned tax treaty between the two countries, experts say.
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