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UBS executive Mark Branson told a Senate investigative panel on Wednesday that the Swiss banking giant would not provide the names of approximately 46,000 American clients in a tax evasion lawsuit authored by the Internal Revenue Service - citing Swiss law.
UBS last month agreed to pay $780 million in fines to resolve a cross-border tax evasion case with the U.S. Department of Justice and the Securities and Exchange Commission. Over the past 10 years, UBS had been seeking clients in the United States and setting them up with accounts in Switzerland, allowing them to avoid paying U.S. taxes, while the bank earned as much as $140 million per year in interest.
UBS will pay $ 380 million in disgorgement of profits plus $400 million representing U.S. federal backup withholding tax required to be withheld by UBS. The total also includes interest and penalties, and restitution for unpaid taxes.
As part of the settlement, UBS was also to immediately provide an undisclosed number of names to the U.S. tax authorities. The government earlier estimated that as many as 19,000 U.S. customers may have undeclared Swiss bank accounts - although the bank admitted on Wednesday that the figure is more than twice that.
Branson told the senate committee that UBS had about 46,000 accounts held by U.S. taxpayers. Of those, 30,000 were accounts held by Americans who live in the U.S. and 16,000 were held by taxpayers outside the U.S.
But now UBS insists that turning over the account names would violate Swiss privacy law and jeopardize its license to stay in business - since the Swiss government does not recognize tax evasion as a crime. UBS maintains that the dispute should be resolved through diplomacy and not in court.
The Department of Justice had agreed to defer any prosecution for at least 18 months or longer if the bank needs more time to expel its U.S. cross-border business - but that could change if UBS is found in contempt by a federal judge for refusing to identify the rest of its U.S. clients.
In addition, the Swiss Federal Banking Commission has concluded that UBS violated the requirements for proper business conduct, and it barred UBS from providing services to U.S. resident private clients out of non-SEC registered entities. Further, the SFBC ordered UBS to enhance its control framework around its cross-border businesses and announced that the effectiveness of such a framework will be audited.
by RTT Staff Writer
Source: http://www.rttnews.com/Content/TopSt...=Top%20Stories
UBS last month agreed to pay $780 million in fines to resolve a cross-border tax evasion case with the U.S. Department of Justice and the Securities and Exchange Commission. Over the past 10 years, UBS had been seeking clients in the United States and setting them up with accounts in Switzerland, allowing them to avoid paying U.S. taxes, while the bank earned as much as $140 million per year in interest.
UBS will pay $ 380 million in disgorgement of profits plus $400 million representing U.S. federal backup withholding tax required to be withheld by UBS. The total also includes interest and penalties, and restitution for unpaid taxes.
As part of the settlement, UBS was also to immediately provide an undisclosed number of names to the U.S. tax authorities. The government earlier estimated that as many as 19,000 U.S. customers may have undeclared Swiss bank accounts - although the bank admitted on Wednesday that the figure is more than twice that.
Branson told the senate committee that UBS had about 46,000 accounts held by U.S. taxpayers. Of those, 30,000 were accounts held by Americans who live in the U.S. and 16,000 were held by taxpayers outside the U.S.
But now UBS insists that turning over the account names would violate Swiss privacy law and jeopardize its license to stay in business - since the Swiss government does not recognize tax evasion as a crime. UBS maintains that the dispute should be resolved through diplomacy and not in court.
The Department of Justice had agreed to defer any prosecution for at least 18 months or longer if the bank needs more time to expel its U.S. cross-border business - but that could change if UBS is found in contempt by a federal judge for refusing to identify the rest of its U.S. clients.
In addition, the Swiss Federal Banking Commission has concluded that UBS violated the requirements for proper business conduct, and it barred UBS from providing services to U.S. resident private clients out of non-SEC registered entities. Further, the SFBC ordered UBS to enhance its control framework around its cross-border businesses and announced that the effectiveness of such a framework will be audited.
by RTT Staff Writer
Source: http://www.rttnews.com/Content/TopSt...=Top%20Stories