On Friday, March 31st, it was announced that Swiss banking giant Credit Suisse is under investigation for assisting clients with tax evasion.
Tax authorities in the UK, the Netherlands, Australia, Germany and France reached out to Credit Suisse concerned over what they referred to as “client tax matters.”
The UK’s Her Majesty’s Revenue and Customs (HMRC) summarized the group’s objectives behind this probe: “The first phase of the investigation, which will see further, targeted, activity over the coming weeks, is focused on senior employees from within the institution, along with a number of its customers.”
“The international reach of this investigation sends a clear message that there is no hiding place for those seeking to evade tax.”
“Promoters and facilitators of tax evasion schemes, and their customers, need to wake up to reality and accept that attempting to hide wealth overseas, or within institutions, doesn’t work and doesn’t place them out of our reach.”
Dutch & Australian Governments Target Credit Suisse Clients for Tax Evasion
As part of this tax evasion probe, Dutch tax authorities raided Credit Suisse clients’ homes, taking possession of “property, cash, 35 paintings worth €1.2m (£1m), a luxury Mercedes, and a 1 kilogram gold ingot,” as reported in The Guardian.
Dutch authorities claimed that undisclosed leads related to close to 55 thousand international accounts and about 4 thousand local ones sparked this investigation.
Additionally, Australian tax authorities are looking into 346 individuals with accounts with Credit Suisse. According to Australia’s Minister for Revenue and Financial Services Kelly O'Dwyer, these 346 account holders had ties to Credit Suisse relationship managers being investigated for purportedly pushing tax evasion schemes onto their clients.
O'Dwyer said, “The fact that these accounts are unnamed means that by their very nature they are likely to have been established to hide the identity of the owner.”
“Taskforce agencies are working through their intelligence to determine the taxpayers in this group who have done the right thing, and those who have been concealing the true nature of their tax affairs,” she added.
While O’Dwyer was certain that many of the listed Australians have or will comply with their tax obligations, she was emphatic in asserting that tax evaders will be prosecuted.
“The message from these investigations makes it clear that governments worldwide are shining a light on offshore tax evasion, and it's only a matter of time before you're in the spotlight,” O’Dwyer said.
Credit Suisse & Tax Justice Activists Speak Out on Tax Evasion Investigation
A Credit Suisse spokesperson confirmed that tax authorities had been in touch with the Zurich-based bank regarding these alleged claims of tax evasion and that the institution was “cooperating.”
The spokesperson did assert that the bank “continues to follow a strategy of full tax compliance.”
The Swiss government also expressed its concern over the investigation, alleging that the country is being singled out.
“The Office of the Attorney General of Switzerland is concerned that Switzerland was specifically excluded when this operation was organised,” said the Swiss Attorney General.
Furthermore, the Attorney General also complained that Dutch authorities had failed to heed to “customary practices and rules of international cooperation and mutual assistance,” adding that it “expects a written explanation from the responsible Dutch authorities, and is considering what further action needs to be taken.”
As reported by Reuters, this turn of events forced Credit Suisse to remove a series of ads it ran in UK newspapers on Sunday, focusing on the institution’s “zero-tolerance policy on tax evasion.”
These untimely double-page ads proclaimed that Credit Suisse “wishes to conduct business with clients that have paid their taxes” and “continue to work closely with the local authorities in all matters and particularly in this new case.”
At the same time, plenty of tax justice activists spoke out against Credit Suisse and its banking activities. “Any notion that Swiss banks are better at banking than other banks in other countries is simply untrue, they just don’t play by the rules,” said Miles Dean, a lawyer with Milestone International Tax.
Furthermore, Alex Cobham, chief executive of Tax Justice Network, said, “Allegations of laundering and tax evasion on this scale would, if proven, indicate the bank was effectively a global criminal enterprise.”
Cobham added, ‘There is a widespread view that there is institutional corruption of financial services in Switzerland. It’s no coincidence that the Swiss attorney general was kept in the dark about these international raids.”
What are your thoughts on Credit Suisse’s latest tax evasion troubles?