In the three-tier list compiled by OECD, Switzerland was placed in the middle tier of countries, which have adopted the norms on exchanging tax information but not yet 'substantially' implemented them.

The Swiss, government, under tremendous pressure from the US, and few European nations decided on March 13 to ease the country's banking secrecy and fully adopt OECD tax standards.

Despite its complex federalistic political structure, Switzerland's tax structure is extremely simple.

Lump sum tax
Retired foreigners who become residents of Switzerland can choose to pay a lump sum annual tax, which is calculated based on their rental payments (or the rental value of their house or apartment) with no relation to their real income or wealth.

Income tax
Taxes depend on where you live, as the rate varies from canton to canton.

Wealth tax
Swiss cantons levy a small wealth tax of maximum 1% of your net assets.

Capital gains tax
Switzerland does not apply capital gains taxes, except for professional equity and real estate traders.

The world's rich hide at least $1.89 trn of the estimated $7 trn of private wealth according to the Swiss Bankers Association, though others put the figure much higher.

Switzerland passed its banking secrecy laws in 1934 during a worldwide depression and under the threat of espionage by France and Nazi Germany.

And after the 2001 terrorist attacks on the United States, Switzerland started takinga proactive role in investigating suspected financiers of global terrorism.

Read on to find out about the other tax havens of the world...

Image: A man cycles during snowfall in Zurich, Switzerland. | Photograph: Arnd Wiegmann/Reuters

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