1 Aug 2009

Deal reached in tax row

9:33 am on 1 August 2009

The United States government and Swiss bank UBS have reached an "agreement in principle" in a dispute over tax evasion by US customers.

The US Justice Department attorney has told a federal judge the two parties agreed on the "major issues".

A court case scheduled to begin next Monday will now be postponed.

The US had accused UBS of violating US laws and insisted the bank reveal the names of US clients who had set up Swiss accounts to evade tax.

UBS shares in New York rallied 6.1% on the news.

The BBC reports the Justice Department has been seeking the names of more than 50,000 US customers with Swiss accounts.

But UBS maintained that divulging the names would violate Swiss bank secrecy laws.

In February, UBS admitted to US tax fraud and agreed to pay $US780 million as part of a provisional deal to settle charges that it helped thousands of US clients use Swiss bank accounts to evade taxes.

But US officials argued this was not enough and asked for the identities of all such account holders.