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Economy Briefs: Swiss court delivers blow to U.S. tax evader deal
GENEVA — Talks to resolve a long-running spat between Switzerland and the United States over how to pursue suspected tax evaders suffered a blow Wednesday, when a Swiss court blocked the handover of one unnamed bank client’s data to U.S. authorities.
The Federal Administrative Court said a 1996 treaty between Switzerland and the United States doesn’t allow the U.S. Internal Revenue Service to request the account details of potential tax cheats without clear evidence of fraudulent intent.
Drawing on Switzerland’s distinction between evasion and fraud, the court said evidence of tax evasion, such as failure to declare a Swiss bank account, didn’t provide sufficient grounds for the IRS to receive the data. It also criticized the fact that the IRS didn’t specifically name the suspected tax cheat in their information request.
The IRS had asked its Swiss counterpart in September to provide details on certain types of American clients who it said had received help from Credit Suisse in hiding income and assets in secret accounts.
“Administrative assistance shall not be granted for presumed tax evasion, even if high amounts are at stake,” the court said. “The mere failure to declare a bank account may be qualified - at the utmost - as a tax evasion, which is not subject to administrative assistance.”
The ruling, which cannot be appealed, puts a strain on negotiations between Bern and Washington aimed at facilitating the exchange of information on suspected tax cheats.
Verizon Wireless to charge for subscriber upgrades
Verizon Wireless, the country’s largest cellphone company, says it will start charging $30 every time a subscriber wants to upgrade to a new phone.
Other phone companies have introduced similar fees. Competitor AT&T Inc. raised its fee from $18 to $36 this year.
Verizon says it will start charging the fee April 22, and the money will help fund customer support and online educational tools.
Verizon is introducing the fee as cellphone companies are seeing their profits cut by the cost of subsidizing smartphones, especially iPhones. Smartphones generally cost hundreds of dollars more than they sell for in stores. Wireless carriers count on making the money back through service fees over time, but those fees aren’t growing as fast as smartphone sales.
BMW, VW hit sales records for 1st quarter
BERLIN — German automakers BMW and Volkswagen on Wednesday reported record sales for the first quarter, continuing an export-driven surge that contrasts with Europe’s chronic debt woes and slack economy.
Luxury-maker BMW AG said its worldwide sales were fueled by rising deliveries in China and the United States. It said January-March deliveries by the BMW Group - which also includes the Mini and Rolls-Royce brands - were 11.2 percent higher than a year earlier at 425,528 vehicles.
First-quarter sales in the U.S. were up 16.6 percent at 75,829 cars while deliveries in China rose 36.8 percent to 80,014.
BMW said it also saw its best-ever monthly sales in March - selling a total of 185,728 cars, a year-on-year increase of 12 percent. BMW is due to release first-quarter earnings figures May 3.
Volkswagen AG sold 1.36 million vehicles, an increase of 10.5 percent, as a difficult European market was outweighed by strong gains in North American and Asia.
Sales fell by 3.7 percent in Western Europe outside Germany, but rose 13.7 percent in the Asia-Pacific region and 27.6 percent in North America, to 135,700 vehicles.
Nokia lowers 2012 outlook
HELSINKI — Nokia Corp. says heavy competition will hit first-quarter performance especially in developing markets and that it expects no improvement in the second quarter.
The phone-maker cites multiple factors for hitting sales of cellphones, including in the smartphone sector, “particularly in India, the Middle East and Africa and China.”
The Finnish company said Wednesday that operating margin in the first quarter 2012 was “approximately negative 3 percent, compared to the previously expected range of ‘around break-even, ranging either above or below by approximately 2 percentage points.’ “
Nokia said that second-quarter performance would not improve from the first quarter.
• From wire dispatches and staff reports
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