May 7, 2014 / 6:32 PM / 5 years ago

UPDATE 1-Swiss minister says tax deal with Italy possible by year-end

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BELLINZONA, Switzerland, May 7 (Reuters) - Switzerland’s finance minister said on Wednesday it should be possible to reach a deal with Italy over long-running negotiations aimed at disclosing Italian savers’ secret holdings in Swiss bank accounts by the end of the year.

Talks between the two countries have been delayed by government changes in Italy, which has long suffered rampant tax evasion on which successive administrations have pledged to crack down.

“It is possible to reach an agreement by the end of this year,” Eveline Widmer-Schlumpf told Reuters on the sidelines of an event in the Swiss town of Bellinzona.

Widmer-Schlumpf said the most recent interruption to the talks, which came with the end of former Prime Minister Enrico Letta’s tenure, had delayed proceedings by two or three months.

The Organisation for Economic Cooperation and Development has proposed governments automatically share information on taxpayers’ offshore bank and brokerage accounts with foreign tax authorities.

Widmer-Schlumpf said that Switzerland’s adhering to this automatic exchange system would not be compatible with remaining on Italy’s “black list” of countries that do not fully cooperate in the fight against tax evasion.

Lawmakers estimate that as much as 250 billion euros ($350 billion) in Italian assets reside outside the country, much of it in Switzerland. More than 15 billion euros in revenue and assets were hidden outside Italy in 2013, mostly in tax havens, according to figures published in January.

The automatic exchange system will not apply to transactions which occurred in the past.

“We need to find a solution for what happened in the past. The automatic exchange of information does not apply to the past so we need to find common ground,” Widmer-Schlumpf said. She did not elaborate on details of the talks. ($1 = 0.7183 Euros) (Reporting by Elvira Pollina; writing by Isla Binnie; editing by Andrew Roche)

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