The Swiss government late last week announced it has signed a new double taxation agreement with the US in a move that is designed to reduce the legal and rhetorical assault on Switzerland for its bank secrecy laws and status as one of the world’s most  important offshore tax havens, media reports said.

The agreement requires the backing of Swiss cantons and business associations, however.
Timothy Geithner, the US Treasury Secretary, was quoted as saying: “This treaty will increase our ability to enforce our tax laws and will help bring an end to an era of offshore accounts and investments being used for tax evasion.”

Following the Group of 20 meeting of large industrialised nations in London in April, Switzerland was put on a “grey list” of jurisdictions that have promised to co-operate on exchange of information agreements.

Meanwhile, a number of jurisdictions, including Singapore, Monaco and Liechtenstein, have moved to recognise information exchange standards as laid down by the Organisation for Economic Cooperation and Development, the Paris-based body representing large countries such as the US, Germany and Japan.

Switzerland’s banking industry has complained that some nations that have been putting it under pressure are being hypocritical as countries such as the UK, with its Crown dependencies such as the Channel Islands, for example, has a number of offshore financial jurisdictions, while the US has a tax haven in Delaware.

There has been some concern that a legal argument between UBS, the Swiss bank, and the US Internal Revenue Service, over the IRS's request for thousands of names of UBS clients, could derail any agreement between Switzerland and the US on exchange of information.