The two Alpine states have concluded talks on extending administrative assistance over tax issues under standards established by the Organisation for Economic Co-operation and Development, the Swiss government said in a statement late yesterday.

The agreement means that Switzerland needs only to sign one more such agreement to pass the test of reaching 12 such deals, which will prove it has co-operated fully with OECD requirements on countries to open up their financial affairs to help root out tax evasion.

For the moment, the Paris-based OECD – a group of the world’s large economic powers – has put Switzerland on a “grey list” of nations that have said they will co-operate on exchanging information with other countries.

Switzerland’s centuries-old bank secrecy laws do not – unlike countries such as the US – recognise the difference between tax evasion and avoidance, although fraud is a crime. The country’s biggest bank and wealth manager, UBS, has been embroiled in a long-running tax case in the US for allegedly helping wealthy US citizens dodge taxes.

“Switzerland and Austria have concluded negotiations on extending administrative assistance in tax matters under Article 26 of the OECD Model Convention and have initialled a revised double taxation agreement,” the Swiss government said.

The Group of 20 nations meeting in London in April this year had warned that countries which did not quickly sign tax agreements could face sanctions.

Switzerland has so far initialled double-taxation treaties with Denmark, Luxembourg, Norway, France, Mexico, the US, Japan, the Netherlands, Poland and the UK.