Nick Shaxson ■ It seems that Credit Suisse’s fine may be tax-deductible after all
We have written recently about how Credit Suisse’s $2.6 billion fine for its history of abusing the U.S. tax system and facilitating high crimes may seem like a lot of money, but it could — and should — have been a lot worse. Why did no bankers go to jail? And, perhaps more importantly, why does it still have its U.S. banking licence?
But there has been a palliative, it seems: according to reports:
“As part of its plea agreement, Credit Suisse agrees to forego any kind of tax deduction for any of the payments it makes.”
Which is fine and dandy — good, in fact, as far as it goes. But now, from the Swiss newspaper Le Matin:
“During the UBS scandal, the debates raged in parliament. Then, nothing happened. Or, in fact, a majority of the parties on the right (UDC and PLR) buried the idea of preventing the fines to be deductible from their profits (for tax purposes.) The result is that the record fine that Credit Suisse has just been hit with in the United States (US$2.6 billion) may be deductible after all.”
In other words, U.S. taxpayers won’t be sticking with the bill, but CS may well foist it on ordinary Swiss citizens instead. Let’s see what happens: the outcome is currently uncertain.
If it ends up being tax-deductible, one may conclude that this is poetic justice of a kind, given Switzerland’s role as a large, mucky tax haven. And it will doubtless infuriate many ordinary Swiss people, being stuck with part of the bill for all this criminality: this will doubtless provoke debate and reflection in Swiss society, which is much needed. If truth be told, we don’t have a beef with ordinary Swiss taxpayers: it’s the jurisdiction and its tax and secrecy laws that bother us.
And besides, the United States is hardly one to talk about being a tax haven.
Hat tip: James Henry.