Swiss bankers are under obligation to keep any information about you or your account strictly confidential.
This bank secrecy is among the strictest in the world and stems from an age-old historical tradition. It is established in Swiss law. Any banker who reveals information about you without your consent risks several months in prison.
The only exceptions to this rule concern serious crimes such as gun smuggling and drug trafficking.
Bank secrecy is not lifted for tax evasion. This is because failure to report income or assets is not considered a crime in Switzerland. As such, neither the Swiss government, nor anyother government, can obtain information about your bank account. They must first convince a Swiss judge that you have committed a serious crime punishable by the Swiss Penal Code.
Bank secrecy will not be lifted for private matters such as inheritance or divorce if you have kept your banking information strictly confidential. It is up to plaintiffs to prove that the account exists if they wish the judge to pursue the case. In this respect, the numbered account provides the maximum degree of confidentiality.
Switzerland does not levy any taxes on Swiss bank accounts owned by non residents. There are 3 exceptions to this rule:
1. Swiss withholding tax
Dividends and interest paid by Swiss companies are subject to a 35% withholding tax. The bank will keep 35% of the interest or dividend and send it to the Swiss tax authorities on a no-name basis. This tax concerns mainly Swiss clients. Non-resident very rarely pay this tax since they usually do not invest in Swiss companies. Even if you want to earn interest in Swiss francs, you just need to invest the funds in a money market fund to be exempt from this whitholding tax.
2. US persons
US persons (i.e. US citizens, green card holder and US taxpayers) are faced with the following choice. Either they renounce to invest in US securities from their Swiss bank account, or they need to report it to the IRS. A common strategy for US clients is to use their bank accounts in the US to invest in US equities and use their Swiss bank account to diversify into non-US investments.
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3. EU residents
Starting in 2005 clients who live in the European Union will have to pay a withholding tax on the interest paid by certain investments. This tax starts at 15% and will gradually reach 35%. No exchange of information nor any taxes on capital or capital gains will be levied.
