Switzerland Adopts New Tax Info Sharing Standards

July 8, 2011 International Tax CooperationOffshore BankingTaxation in Switzerland

Switzerland to Share tax InformationSwitzerland has implemented new standards and procedures for the sharing of tax information, and could soon offer greater levels of cooperation to foreign tax authorities conducting investigations into tax evasion.

On June 6th the Federal Council of Switzerland adopted the new Federal Act on International Administrative Assistance in Tax Matters, updating the country’s international information sharing standards, and ensuring that these standards are on par with those advocated out by the Organization of Economic Cooperation and Development (OECD).

The new Act mandates that Swiss tax authorities will provide reasonable assistance to overseas governments if investigations are being conducted on taxpayers suspected of using Swiss bank accounts to hide their assets and circumvent their tax obligations. Previously, Swiss legislation only required information sharing in cases of suspected tax fraud.

In an effort to quell national concerns about a perceived collapse of the country’s infamous secrecy rules, the Finance Minister of Switzerland Eveline Widmer-Schlumpf stated that the government would not be providing international assistance or disclosing information on any “fishing expeditions”, meaning that all requests must be backed with evidence of illicit behavior. She added that requests for information and assistance will need to be made on a case-by-case basis, and all collective applications will be automatically dismissed. The Swiss government will also routinely refuse any applications that are based on evidence gathered from stolen data or by any other means that are punishable under Switzerland’s laws.

With the implementation of the new standards, the OECD is set to reclassify Switzerland as a jurisdiction which has “substantially implemented the agreed standards for tax transparency”.

Photo by amish.patel