UBS and US Reach Settlement

August 13, 2009 International Tax CooperationOffshore BankingTaxation in SwitzerlandTaxation in USA  No comments

The Swiss bank UBS has reached a settlement deal with the US Government regarding allegations of tax evasion.

An out-of-court settlement has been brokered between the US Government, on behalf of the US Internal Revenue Service, and the Swiss Bank UBS. Exact details of the agreement have not yet been revealed, and are not promised until the final agreements are signed by all involved parties. At the moment the settlement sits as an “initialed agreement”. According to Ken Rubestein, senior partner at law firm Rubinstein & Rubinstein in New York, “This means the deal is effectively done” and “Signing is just a technicality; they are doing the final read-through just to be sure.”

Speculation of the exact nature of the settlement has been rife, and will continue to be so until its announcement, which is expected next week. If previous negotiation updates are any indicator, UBS will provide the US with at least 5,000 names of US resident UBS account holders. There is still a tangible possibility that a penalty or fine will be imposed on UBS.

Statements made regarding the settlement have emphasized that any name disclosure that will occur as a result of this settlement will be done within strict readings of the law, and that the sanctity of the Swiss banking privacy tradition will not be breached.

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