* Hungary govt wants to tax money held in foreign accounts
* Government will ask Switzerland for full disclosure
* Total offshore assets could be worth up to $9 billion
By Marton Dunai
BUDAPEST, Jan 16 Hungary's government plans to
identify and tax all wealth held by Hungarians in foreign -
mostly Swiss - banks, the Hungarian prime minister's chief of
staff Janos Lazar said on Wednesday.
Hungary now wants to tax all holdings in foreign deposits at
an average 35 percent rate, Lazar told reporters.
He said the central European country will ask Switzerland
first to disclose all data pertaining to bank accounts of
Hungarian citizens in Swiss banks.
Hungary's government, which has struggled to improve tax
collection as it works to keep its budget deficit under the
European Union limit of 3 percent of gross domestic product, has
been hostile to offshore holdings since it took power in 2010.
Citing international comparisons and intelligence sources,
Lazar said the total holding of Hungarians in foreign, mostly
Swiss banks is at least 1 trillion forints ($4.53 billion) and
perhaps as much as 2 trillion.
"It's safe to say there are billions of euros worth of funds
abroad," Lazar said. "We ask that Switzerland disclose all data
that could help identify all deposits so that we can tax those
deposits under the Hungarian system."
"Hungary is a front-runner in Central Europe in terms of
Swiss deposits," he said. "We have secret intelligence about the
existence of these accounts, and not insignificant ones. We are
not after a couple of million euros here."
Switzerland handles requests for administrative assistance
confidentially so the Federal Tax Administration, which deals
with such requests, said it could not confirm whether it has
received a request, or comment in any way.
"The treaty between Switzerland and Hungary that enables the
exchange of information in tax matters has not entered into
force yet," an FTA spokesman told Reuters.
The Hungarian government in 2010 allowed two years for
Hungarians to repatriate their offshore assets and pay a modest
10 percent tax on them. The deadline on that expired on Dec. 31.
Lazar said holders of illegally amassed funds will be
prosecuted, although criminal investigation was not the main
goal of the operation.
"We ask Switzerland to give us all data and information," he
said. "Knowing the status quo of Swiss financial confidentiality
we will have to see how far we can take this."
He said Hungary will start similar talks with other European
countries like Austria and notably off-shore haven Cyprus.
A spokesman of the Austrian financial and markets regulator
FMA told Reuters the option to deposit anonymously in Austria
ended years ago and access to funds deposited before is now tied
However, he added that bank confidentiality rules would
prevent any Austrian banks or authorities from disclosing the
identity of the account holders.
($1 = 220.9132 Hungarian forints)
(Additional reporting by Martin De Sa'Pinto in Zurich and
Georgina Prodhan in Vienna; editing by Stephen Nisbet)