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The Rise Of The Swiss Tax Haven In The Interwar Period: An International Comparison


  • Christoph Farquet

    () (Université de Lausanne)


The history of tax havens during the decades before World War II is still little known. To date, the studies that have focused on the 1920s and 1930s have presented either a very general perspective on the development of tax havens or a narrow national point of view. Based on unpublished historical archives of five countries (Switzerland, Great Britain, Belgium, France, Germany), this paper offers therefore a new comparative appraisal of international tax competition during this period in order to answer the following question: What was the specificity of the Swiss case – already considered a quintessential tax haven at the time – in comparison to other banking centres? The findings of this research study are twofold. First, the 1920s and 1930s appear as something of a golden age of opportunity for avoiding taxation through the relocation of assets. Most of the financial centres granted consistent tax benefits for imported capital, while the limited degree of international cooperation and the usual guarantee of banking secrecy in European countries prevented the taxation of exported assets. Second, within this general environment, the fiscal strategies of a tax haven like Switzerland differed from those of a great financial power like Great Britain. Whereas the Swiss administration readily placed itself at the service of the banking community, British policy was more balanced between the contradictory interests of the Board of Inland Revenue, the Treasury, and the English business circles.

Suggested Citation

  • Christoph Farquet, 2012. "The Rise Of The Swiss Tax Haven In The Interwar Period: An International Comparison," Working Papers 0027, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0027

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    References listed on IDEAS

    1. Guex, Sébastien, 2000. "The Origins of the Swiss Banking Secrecy Law and Its Repercussions for Swiss Federal Policy," Business History Review, Cambridge University Press, vol. 74(02), pages 237-266, June.
    2. Palan, Ronen, 2002. "Tax Havens and the Commercialization of State Sovereignty," International Organization, Cambridge University Press, vol. 56(01), pages 151-176, December.
    3. Vogler, R., 2001. "The genesis of Swiss banking secrecy: political and economic environment," Financial History Review, Cambridge University Press, vol. 8(01), pages 73-84, April.
    4. Hautcoeur, Pierre-Cyrille & Sicsic, Pierre, 1999. "Threat of a capital levy, expected devaluation and interest rates in France during the interwar period," European Review of Economic History, Cambridge University Press, vol. 3(01), pages 25-56, April.
    5. Kindleberger, Charles P., 1993. "A Financial History of Western Europe," OUP Catalogue, Oxford University Press, edition 2, number 9780195077384.
    6. Smits, J.-P. & Woltjer, P. & Ma, D., 2009. "A Dataset on Comparative Historical National Accounts, ca.1870-1950: A Time-Series Perspective," GGDC Research Memorandum GD-107, Groningen Growth and Development Centre, University of Groningen.
    7. Paquier, Serge, 2001. "Swiss holding companies from the mid-nineteenth century to the early 1930s: the forerunners and subsequent waves of creations," Financial History Review, Cambridge University Press, vol. 8(02), pages 163-182, October.
    8. Peden, G. C., 2000. "The Treasury and British Public Policy 1906-1959," OUP Catalogue, Oxford University Press, number 9780198207078.
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    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • F39 - International Economics - - International Finance - - - Other
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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