Swiss court rejected bank data handover to US in setback for tax talks

A Swiss court has ruled in favor of an American client of Credit Suisse who sought to prevent his bank account data from being handed to U.S. tax authorities

The ruling is a setback for Switzerland’s efforts to no longer be known as a tax haven and for ongoing talks with Washington to facilitate information exchange on suspected tax evaders.

The Federal Administrative Court says a 1996 treaty between Switzerland and the United States doesn’t allow the U.S. Internal Revenue Service to request the account details of potential tax cheats without clear evidence of fraudulent intent.

The court said in a statement that evidence of tax evasion, such as failure to declare a Swiss bank account, isn’t sufficient for the IRS to receive the data.