IOC spared from paying retroactive taxes
Posted: Tuesday March 16, 1999 03:43 PM
BERN, Switzerland (AP) -- The Swiss finance minister Tuesday opposed making the scandal-shaken International Olympic Committee pay value-added taxes back to 1995.
Finance Minister Kaspar Villiger, whose recommendations in such matters are usually approved by the seven-member cabinet, told parliament that he would propose that the IOC be liable for the tax -- currently 7.5 percent for most sales -- only in the future, probably beginning July 1.
As allegations of receiving bribes and favors mounted against IOC members last month, the Lausanne-based IOC withdrew its long-standing request for an exemption from the value-added tax. The committee is exempt from paying other forms of tax. The Swiss government approved the exemption last September.
The IOC asked for an exemption from the tax when it was first introduced in 1995. The government's initial decision to grant the exemption drew widespread criticism in Switzerland.
After the IOC withdrew its request, Finance ministry spokesman Hugo Schittenhelm said the Olympic body would have to pay the tax retroactively to 1995.
But Villiger told the parliament Tuesday that retroactive taxes "would be unfair to the IOC." He said the committee had made agreements with suppliers, and that the amount to be paid them would have to be increased should the tax be applied retroactively. "That would violate good faith," he said.
The exemption had been widely valued at 2 million Swiss francs per year (US$1.4 million), but the IOC said it was closer to 300,000 francs (US$208,000).
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