Norwegians won’t be able to stash away money in secret Swiss bank accounts for much longer. An agreement recently signed by Finance Minister Siv Jensen and Switzerland’s ambassador to Norway formalizes the sharing of bank account information between the two countries, and record numbers of Norwegians already are reporting their overseas wealth to tax authorities.
The agreement sets the foundation for automatic exchange of information regarding accounts held by Norwegians in Switzerland and, for that matter, Swiss in Norway. Asked whether that means the end of secret Swiss bank accounts, Swiss Ambassador Rudolf Knoblauch told newspaper Aftenposten, recently, “Yes, at least in regards to other countries.”
Harder to hide money
That means it will become much harder for Norwegians and others to hide money in Swiss accounts and thus evade taxation on both its interest income and its asset value. Knowing their days are numbered, Norwegians are owning up to their Swiss and other overseas accounts like never before.
Norway became a signatory in October 2014 to an international agreement regulating the exchange of account information among countries. Nearly 80 countries around the world have since signed on as well.
All countries must also have bilateral accords, and that’s what Norway and Switzerland have now agreed upon. Norwegian tax authorities have maintained for years that it was vitally important to get Switzerland to go along with the exchange of account information for tax purposes, because Switzerland has been viewed as Norwegians’ top spot for hiding money from authorities.
Record numbers revealing accounts
State tax director Hans Christian Holte told NRK this week that a record 384 wealthy Norwegians came clean last year, finally reporting amounts of money they’d deposited abroad and seeking tax amnesty after failing to report their overseas accounts. That’s up 30 percent from the 295 who revealed hidden fortunes in 2014, Holte said.
Aftenposten reported that of the 66 cases handled by Norwegian tax authorities as of mid January, Switzerland figured most frequently as the country where they’d deposited money to avoid it being subject to Norway’s controversial formueskatt, the tax charged annually on Norwegians’ individual net worth. Great Britain and the US have also been popular venues for overseas accounts, along with various places known as tax havens.
The money Norwegians had stashed in Switzerland amounted to an estimated NOK 5.3 billion, which in turn generated interest income of NOK 114 million, all of which was taxable in Norway. In 2014, around NOK 7 billion was reported in to tax authorities.
Amnesty still offered
Norway has offered tax amnesty since 2007 to those voluntarily disclosing their previously hidden overseas funds. Norwegians and foreign citizens subject to paying tax in Norway are still required to pay tax for all the years they avoided it, but won’t be hit with punitive tax fines in addition.
NRK reported Thursday that since 2007, around NOK 50 billion in hidden fortunes has been revealed, plus NOK 2 billion in interest income. That’s resulted in another NOK 1.3 billion paid in back taxes to the state.
Time is running out for those who still haven’t disclosed any overseas fortunes. Norway is already set to receive bank account information from countries including the US, and from 2018, Switzerland will automatically report banking information to Norwegian tax authorities.