Tax Information Exchange Agreements Switzerland

On 4 April 2012, the Federal Council decided to conclude mutual assistance agreements according to international standards, not only in the form of double taxation agreements (DBAs) but also on TIEAs. The DBA and TIEA are, in principle, equivalent instruments for concluding a mutual assistance clause in accordance with the international standard. Unlike the DBA, which is primarily aimed at avoiding double taxation and therefore contains other essential provisions, only regulates the exchange of information on demand. Since then, it has been possible for foreign states to apply for assistance with the Swiss authorities (including the Federal Tax Administration (AFC) with the Swiss authorities when it is a simple tax evasion (not fraud). To be admissible, the application must include information such as the identity of the person concerned, a reference to the information requested and even the tax purpose for which the information is requested. Applications must therefore be specific and the information must be “reasonably relevant” to the application of the provisions of the Convention on Administrative Assistance in Tax Matters or National Tax Legislation of any kind. All vague and imprecise fishing expeditions are still strictly prohibited. In June 2015, the OECD`s Tax Affairs Committee (CFA) approved a standard protocol on the agreement. The standard protocol can be used by jurisdictions if they wish to extend the scope of their existing TIEAs to the automatic and/or spontaneous exchange of information.

The agreement on the exchange of tax information with Brazil includes the exchange of tax information on request, with the exception of the automatic or spontaneous exchange of information. The purpose of the agreement is – from Switzerland`s point of view – income and capital taxes as well as gift and inheritance tax. Since 2009, Switzerland has accepted more requests for information exchange (IOA) from global players and has harmonized the otherwise private nation`s banking policy with more transparent OECD standards. Lenz – Staehelins Jean-Blaise Eckert and Frédéric Neukomm discuss the changes. On 23 November 2015, Switzerland and Brazil signed an agreement on the exchange of tax information. The agreement on the exchange of tax information with Brazil – the tenth such agreement in Switzerland – sets out the rules for the exchange of information on demand in tax matters. (1) Switzerland`s tax information exchange agreements with Andorra, Greenland, Guernsey, the Isle of Man, Jersey, San Marino and Seychelles are already in force. The tax information exchange agreements with Belize and Grenada have been signed, but they are not yet in force. For more information on this topic, please contact David Brunnimann at Meyerlustenberger Lachenal by phone (41 44 396 91 91) or e-mail (david.broenimann@mll-legal.com). The Meyerlustenberger Lachenal website is available www.mll-legal.com. To date, Switzerland has entered into 53 contracts that exclude double taxation under the new international standard (of which 47 are in force) and 10 tax information exchange agreements (7 of which are in force). It should also be noted that a peer review of the World Forum led to Switzerland being assessed on 26 July last year as “broadly compliant” with the international standard for information exchange.

In the past, the Netherlands has submitted bundled applications to all Dutch residents holding bank accounts with certain Swiss banks (UBS, Credit Suisse, etc.), unless they have provided the bank with proof that they have properly disclosed their banking information to the Netherlands.