Hungary to hunt down hidden assets

By bne IntelliNews January 17, 2013

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Eyeing another source of income to help fill government coffers emptied by the crisis and unorthodox economic policies, Hungary is launching a hunt for undeclared offshore assets on which it plans to levy a 35% tax, an official announced on January 16.

Hoping to identify all wealth held by Hungarians in foreign - mostly Swiss - banks, the Hungarian prime minister's chief of staff Janos Lazar said his country is joining the likes of the UK and Germany in asking Switzerland for data on assets. The official was quoted by Dow Jones as saying that about "HUF1 trillion, €3-3.5bn, is in question, that's a huge amount."

"Hungary is a front-runner in Central Europe in terms of Swiss deposits," Lazar added, reports Reuters. "We have secret intelligence about the existence of these accounts, and not insignificant ones. We are not after a couple of million euros here. It's safe to say there are billions of euros worth of funds abroad. We ask that Switzerland disclose all data that could help identify all deposits so that we can tax those deposits under the Hungarian system."

Swiss authorities refused to confirm or deny whether it has received a request from Hungary for information. The banking secrecy stalwart has recently been in talks with the UK, Germany and Austria over raising transparency, as tax shelters become a hot public topic amidst the crisis, backlash against bankers and harsh austerity. The Hungarian official claimed that has yielded significant incomes for the countries involved.

"We ask Switzerland to give us all data and information," Lazar said. "Knowing the status quo of Swiss financial confidentiality we will have to see how far we can take this." He added that Budapest will also seek to start similar talks with other EU banking shelters, most notably Cyprus.

Hungary has just wrapped up a two-year partial amnesty for "escaped capital," which allowed it to be repatriated at a 10% tax rate, Lazar pointed out. "This was ample time," he insisted. "Now we're planning to impose a 35% tax rate on all assets currently in Switzerland." Lazar said holders of illegally amassed funds will be prosecuted, although criminal investigation is not the main goal.

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