Politics

Harper seals Swiss tax treaty

Canada has sealed a deal with Switzerland that would free more financial records after years of applying pressure to the European banking haven to cough up information about tax evaders.

Canada has sealed a deal with Switzerland that would free more financial records after years of applying pressure to the European banking haven to cough up information about tax evaders.

Prime Minister Stephen Harper, left, meets with Swiss President Doris Leuthard at Lohn Manor in Kehrsatz, Switzerland on Friday. ((Sean Kilpatrick/Canadian Press)

Prime Minister Stephen Harper announced changes to an existing double-taxation agreement Friday during a visit with Swiss President Doris Leuthard.

The measures would help with the exchange of information on citizens who might be suspected of hiding taxable income.

"Switzerland's been very co-operative with us in that regard," Harper told reporters at a joint news conference.

"The double-taxation agreement we're signing today will further enhance co-operation and obviously we'll use the information we gain through this to ensure that Canadians respect Canadian tax laws."

Canada, through the Organization for Economic Co-operation and Development (OECD), pushed for years for Switzerland to co-operate more on the exchange of tax information.

The United States threatened a lawsuit against the Swiss UBS bank last year in the hopes of recouping millions in lost tax revenues. The Swiss government finally brought in major changes to its banking system that broke down some of its stringent confidentiality laws around private accounts.

Countries such as Canada with existing taxation treaties had to individually negotiate with Switzerland in order to have the changes apply to their own circumstances. But the renegotiated treaty is unlikely to help Canada find out more about thousands of accounts held by Canadians with the HSBC and UBS banks. If the treaty changes are finalized before year's end, they will apply in January 2011.

The Canadian Revenue Agency has already collected $33 million from Canadians who have stepped forward to admit they had money in accounts at the HSBC and UBS banks over the past year. Details on those accounts had been leaked to the U.S. and French governments by former bank employees, and then shared with Canadian authorities.

Harper is also announcing an expanded air-transportation agreement with Switzerland, which will allow airlines from each nation to operate more flights into third countries. Harper is in Switzerland to attend the Francophonie summit. On Sunday, he will travel to Ukraine for an official visit.

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