Swiss hunt UK hedge funds

Finance minister Hans-Rudolf Merz is considering proposals put forward by the Swiss banking federation to introduce a special 10% tax rate for hedge funds.

Merz is eager to stem the exodus of hedge funds from Switzerland to the City, which has established itself as Europe’s centre for the industry.

‘The financial marketplace is of enormous importance to our country. I know that we have a disadvantage in taxes. We understand the problem and we have to solve it,’ he said.

There are 900 hedge funds based in London, representing 80% of Europe’s activity. Switzerland is way off this level despite international finance being a crucial part of its economy.

The proposed tax cut has aroused the scepticism of experts within Switzerland’s department of finance, who feel that offering a special tax rate to a limited and already very wealthy group of individuals is disingenuous.

But Swiss tax policy has been successful in luring multinationals to the country.

See www.accountancyage.com/2187928