Switzerland unveiled plans to make bankers’ bonuses less tax-friendly, aiming to appease political parties calling for pay restraint and win backing for a deal ending a US tax case against UBS.
The Social Democrats, who could make or break UBS’s US tax deal in a parliamentary vote in June, said the proposed measures, to apply to banks and insurers, were a step in the right direction but did not go far enough.
Finance minister Hans-Rudolf Merz, a free-market liberal who had until now opposed state regulation on pay, said the rules were “a clear signal in this direction and for the future”.
Under the planned measures, bonuses linked to a company’s performance would no longer count as personnel expenses, but would instead be treated as taxable corporate profit, the government said yesterday. Bonuses awarded for individual merit would be treated as expenses for the portion that does not exceed a person’s fixed salary and if total pay is 2m Swiss francs ($1.8m) or lower.
Berne agreed in August to hand over to US tax officials the names of 4,450 tax evaders holding secret accounts with UBS, piercing a hole in the country’s famed bank secrecy laws.
But a Swiss administrative court ruling in January blocked the data transfer, forcing the Swiss government to tweak the settlement, which needs parliament approval to become effective.
City A.M. Reporter