Reuters: Private Equity: UPDATE 1-Austria seeks to clinch tax deal with Swiss

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UPDATE 1-Austria seeks to clinch tax deal with Swiss Mar 27th 2012, 16:28 Tue Mar 27, 2012 12:28pm EDT * Austrian Finance Minister says sure of Swiss tax deal by 2013 * Vienna counting on revenue from this to help shore up finances * Source says timetable unlikely to be met (Recasts, adds source comments on talks with Swiss on tax deal) By Michael Shields and Katharina Bart VIENNA/BERNE, March 27 (Reuters) - Austria has stepped up efforts to secure a 1 billion euro ($1.3 billion) tax windfall on wealth its citizens have stashed in Switzerland, money it wants to help balance the budget by 2016. Finance Minister Maria Fekter assured reporters on Tuesday she would reap the rewards of a tax deal with neighbouring Switzerland by next year, but a source familiar with the negotiations said that target was virtually impossible to hit. Vienna last month announced it was going after an estimated 12 billion to 20 billion euros in undeclared Austrian funds in accounts in neighbouring Switzerland. It was following the lead of Germany and Britain, which struck deals to claw taxes back from nationals using Swiss banking secrecy to park savings out of sight. Asked about reports Austrian talks with the Swiss could drag on, Fekter said she had agreed with Swiss counterpart Eveline Widmer-Schlumpf on Monday to intensify the discussions, which would run in parallel to similar Swiss tax discussions with Germany. "We expect everything to be home and dry within a year," Fekter said. "I am very, very confident that in 2013 we will actually get the money we put in (the budget plan)." She said one of her top ministry officials was in Berne on Tuesday to work on an accord. The Austrian government is under pressure to salvage some form of levy on financial transactions not only to raise money, but also to placate the opposition Greens, who have tied their support for a permanent euro zone rescue fund to the issue. Backing from the Greens will be crucial in winning the two-thirds majority needed to get the European Stability Mechanism package through parliament in Vienna. The source said the Austrians were so keen for a quick deal on the tax issue that they were willing to forego an upfront payment - by contrast the Swiss are to pay Germany 2 billion Swiss francs ($2.2 billion) - and were ready to postpone implementation to March 1 instead of January 1 to get a deal into force by 2013. Austria also plans to get 500 million euros in annual revenue from 2014 from a euro zone financial transactions tax, something Germany's finance minister now says will not fly. Fekter said euro zone finance minister would hold intensive discussions on the tax in Copenhagen this week, then put forward the pros and cons to heads of government for their June summit. "The heads of government will have to decide how to proceed with the financial transactions tax, if there are alternatives, which countries will go along and if the project will be pursued further," she told reporters. ($1 = 0.9050 Swiss francs) ($1 = 0.7506 euros) (Reporting by Michael Shields in Vienna and Katharina Bart in Berne; Editing by Mark Heinrich/Ruth Pitchford) Link this Share this Digg this Email Reprints

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