Rules applicable to requests for mutual assistance

In recent years, the exchange of tax information has been massively strengthened by expanding existing instruments and creating new ones. The aim of the international community of states is the prevention of tax advantages as a result of the deliberate concealment of tax data of one state from the other state by a taxpayer.

Historically, the instrument of requests for administrative assistance for these purposes is well known. The automatic and spontaneous exchange of information have been newly created in recent years. The rules for Administrative Assistance have also been adapted and expanded in the course of the reorganization of the exchange of information between states. The new rules of the Administrative Assistance in tax matters combined with the new self-image of the state authorities with regard to the exchange of tax information led in recent years to a large number of federal court decisions that redefined the application and rules for the Administrative Assistance and adapted them to the developments in international tax law. This development is outlined below and the rules and principles that exist today are presented.

The Administrative Assistance is intended to help tax authorities enforce domestic (tax) law with the help of information they receive from foreign tax authorities. In the case of requests for administrative assistance, however, this exchange of information for tax purposes does not take place automatically or spontaneously between the states, but rather a state provides information only in response to a specific and justified request from the tax authorities of another state. The legal basis for Administrative Assistance is provided by the bilateral agreements on the avoidance of double taxation (DTAs for short). In Switzerland, the Tax Administrative Assistance Act (StAhiG) and the Tax Administrative Assistance Ordinance (StAhiV) regulate the implementation of international Administrative Assistance.

According to the Federal Supreme Court, the following rules play a central role in the handling of a request for administrative assistance in order to ensure that data can be supplied from Switzerland to a foreign state by means of a request for administrative assistance:

Identification of the individuals concerned

Since the Federal Supreme Court decision of 12 September 2016(BGE 143 II 136), the practice for identifying the person concerned has been that the requesting state must provide the requested state with sufficient information to enable it to identify the persons concerned without excessive effort. It is important to note that the name of the person does not necessarily have to be mentioned in the request. The bank account number is an example of a possible identification of the data subject without mentioning the name.

This practice has been confirmed by the Federal Supreme Court in other decisions: Decision of 1 September 2017 (BGE 143 II 628), decision of 9 April 2018 (2C_646/2017), decision of the Federal Administrative Court of 30 July 2018 (A-1488/2018).

For further information please read our article concerning BGE 143 II 136

Group requests and list requests

In principle, the law (StAhiG) only provides for requests in individual cases and group requests. According to Jurisprudence , however, it cannot be concluded from this that requests for administrative assistance that concern a majority of persons but are not group requests within the meaning of Art. 3(c) StAhiG are not admissible. So-called "list requests" are also permissible. The Jurisprudence has thus created an additional typology of requests. In this context, the distinction between these different types of requests is not entirely straightforward. For example, in its decision of July 30, 2018 (A-1488/2018), the Federal Administrative Court stated that requests concerning several persons known by name who are in a close relationship to each other (e.g., spouses or a company and its owners) are generally treated as individual requests. If the identification of the person(s) concerned is not by name but, for example, by credit card or bank number, these are also individual requests.

In the case of group requests, the requesting tax authority does not know the names and addresses of the persons concerned. On the contrary, it refers to an undefined number of taxable persons, which cannot be identified individually but only by an identical pattern of behaviour Art. 3 lit. c TAAA ; judgment BGE 143 II 628 of 1 September 2017, judgment 2C_695/2017 of 29 October 2018). According to the Federal Supreme Court, the group request must meet the following criteria in order to be admissible and

does not constitute a "fishing expedition" or an investigation of evidence (Art. 7 lit. a TAAA) (A-1488/2018; BGE 143 II 628; BGE 143 II 628; BGE 143 II 136):

BGE 143 II 628; BGE 143 II 136):

  1. The request shall contain a detailed description of the group, describing the specific facts and circumstances that led to the request.
  2. It must state the applicable tax legislation and the motives for considering that the taxpayers belonging to that group have failed to fulfil their tax obligations.
  3. It must show that the information requested is suitable for ensuring compliance with the obligations.

The list request is an in-between: These are individual requests that are made within the scope of a list request and where the identification is made by means other than the name, e.g. by stating the account number. A number of persons are thus targeted, of whom only a few details are known (ruling 2C_695/2017 of 29 October 2018). In BGE 143 II 628, for example, the request included a list of nine credit card numbers. The Federal Supreme Court held that this was not a group request with identification via patterns of behaviour, because the request for administrative assistance concerned a specific number of persons who would be identified by credit card number. However, since the request for administrative assistance, as in the case of group requests, did not name or address the persons concerned, it was justified for reasons of coherence to apply the three above-mentioned criteria for group requests analogously to list requests.

In several judgments, the Federal Court consolidated this Jurisprudence: Judgment of the Federal Administrative Court of 30 July 2018 (A-1488/2018), Judgment of the Federal Court of 29 October 2018(2C_695/2017).

Illegally acquired data

The question of whether Switzerland should comply with a request for administrative assistance even if the foreign request is based on stolen data has long been controversial. In BGE 143 II 224 of March 17, 2017, the Federal Supreme Court held that a state that purchases Swiss bank data in order to subsequently use it for administrative assistance requests is engaging in conduct that is incompatible with the principle of good faith. Otherwise, the question of whether a state has violated the principle of good faith pursuant to Art. 7 lit. c StAhiG is to be assessed according to the circumstances of the individual case. In its judgment of 17 July 2018(2C_648/2017), the Federal Supreme Court clarified its position Jurisprudence: The mere use of illegally acquired data by the requesting state does not constitute a breach of good faith. The behavior of the requesting state is only disloyal if it gave the requested state an explicit assurance that it would not use passively obtained stolen data for administrative assistance requests and then does not comply with this agreement. Thus, in summary, it can be said that the foreign tax authorities violate Art. 7 lit. c StAhiG and the principle of good faith if they have purchased the stolen data and use it for a request for administrative assistance or if they have assured Switzerland that they will not use stolen data for administrative assistance requests and then do so anyway.

Furthermore, the Federal Supreme Court held in ruling 2C_648/2017 that the good faith of a state is a prerequisite in international relations (see also BGE 143 II 224 and 2C_646/2017). This means that, in principle, there is no reason to doubt the accuracy of other states' statements of facts and declarations. In the event of serious doubts, Switzerland may inquire with the requesting state and, if necessary, request an assurance that the request is not based on information from acts that are punishable under Swiss law. However, the requesting state cannot be deemed to have acted in bad faith if it does not give such an explicit assurance despite Switzerland's request, as long as it is not obliged to give such an assurance under the DTA.

Other Federal Supreme Court decisions on the same subject: Decision of 2 August 2018 (2C_819/2017), decision of 21 December 2018 (2C_619/2018).

For further information see the NZZ article of 2 August 2018

Principle of good faith applies only between States

According to the Federal Supreme Court, the principle of good faith applies in connection with a DTA between the requested and the requesting state(ruling 2C_28/2017 and BGE 144 II 206 of 16 April 2018). In the context of a request for administrative assistance, affected natural persons or legal entities cannot invoke a kind of protection of legitimate expectations (good faith) vis-à-vis the requested state if, for example, the requesting state gave assurances that no tax proceedings would be initiated against them.

Principle of subsidiarity

In decision of 16 April 2018(2C_28/2017 or BGE 144 II 206) the Federal Supreme Court described the principle of subsidiarity. This means that the requesting authority must make use of all the possibilities of information gathering before it can request assistance from the other state. The circumstances at the time of the submission of the request for administrative assistance are of importance. For example, in the aforementioned Federal Supreme Court decision, with reference to the principle of subsidiarity, it was irrelevant that the taxpayer had to notify the requesting state after submitting its tax data in response to a request for assistance.

Principle of availability or reciprocity

The principle of availability is partly DTA integrated into the principle of the right of access and provides that only information obtained under the laws of both contracting states may be obtained and published can be. Consequently, Switzerland, as the requested State, is not obliged to provide information which, under the laws or in the normal administrative procedure of the requesting State cannot be procured (principle of reciprocity). The requesting authority must therefore provide a confirmation of this information when it makes its request, that jurisdiction, in application of their law or in the ordinary course of their administrative practice (Art. 2 para. 1 lit. j aStAhiV). If such confirmation of the Switzerland may refuse to grant administrative assistance only if it has reasons to believe that the declaration made is clearly incorrect. In its decision of 9 April 2018 (2C_646/2017) the Federal Supreme Court concludes that the Netherlands had expressly confirmed that it was in a position to and forward them to Switzerland.


In view of the principles and rules in force, it is clear that the exchange of information on request, with the introduction and dissemination of automatic information exchange (AEOI), will become less important. On the contrary, it can be assumed that the information AEOI obtained will provide States with new "bases" or indications to submit requests for administrative assistance to foreign tax authorities. It is therefore important to keep an eye on the case law and legislation on requests for mutual assistance.