Over the years, wealthy individuals and organizations have relied on tax havens such as Switzerland, Lichtenstein and Panama to hide income. That’s because of these countries’ secretive banking and tax laws. But things are changing for these tax havens and wealthy people still want to find ways to shield their income from taxes.
They now have new options: Bitcoin’s Zerocash, DarkWallet and similar products. Zerocash and DarkWallet offer Bitcoin clients the ability to process financial transactions with minimum risk of revealing their identities. This comes as banks and their wealthiest clients have come under increased scrutiny for their practices. It is an after-effect of the 2008 financial crisis.
A number of governments from major industrialized countries had to overhaul banking industries that many considered corrupt. Tax evaders and tax havens that helped them were obvious targets.
The U.S. government fined UBS, Switzerland’s largest bank, $780 million; Credit Suisse, $2.6 billion; and Julius Baer, $547 million. It also requested that Swiss banks hand out account details of all alleged U.S. tax evaders. Soon, similar pressure was brought to bear by the EU.
Among the end effects: roughly 80 Swiss banks signed a deal with U.S. tax authorities to hand out