Global exchange of tax relevant data

20.11.2019

At its meeting on 20 November 2019, the Federal Council adopted the dispatch on the amendment of the Federal Act on the International Automatic Exchange of Information in Tax Matters (AEOIA). The aim of the draft is to implement the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes. Since the start of Swiss implementation of the AEOI standard on 1 January 2017, the Global Forum has been checking compliance by means of country reviews. On the basis of the recommendations received, the Federal Council approved the consultation of a corresponding proposal at the end of February 2019. Finally, the consultation participants had time until the end of June 2019 to submit their comments. The majority approved the law's proposals. The only criticism at ordinance level was the planned repeal of the exemption provisions for associations and foundations. The Federal Council has now refrained from doing so. In the 2020 spring session, the Federal Assembly will discuss this for the first time.

Media release from the Federal Counsil of 20 November 2019

07.10.2019

About one year after the first international exchange of information on financial accounts (AEOI), a second exchange took place at the beginning of October. Switzerland exchanged information with 63 countries. The remaining 12 states provided data to Switzerland but did not receive any from Switzerland in return. The reason for this one-sidedness was either the non-compliance with confidentiality and data protection requirements or the failure of these states to provide information. The financial exchange affected information on a total of 3.1 million financial accounts sent abroad by Switzerland, while Switzerland received data on 2.4 million financial accounts from abroad. Most of the data went or came to/from Germany.

14.08.2019

At the State Council meeting of 14 August 2019, a motion was submitted to the government of Berne concerning the exchange of financial data within Switzerland. The motion was accepted by the members of the government, but they rejected the request for urgent procedure. The State Council will ask the members of the Grand Council to accept this motion. After successful acceptance by the Grand Council, the latter will decide whether to submit a parliamentary motion to the Confederation.

Article in the Berner Zeitung from August 19, 2019

29.05.2019

In its meeting on 29 May 2019, the Federal Council issued the dispatch on the extension of the automatic exchange of information on financial accounts (AEOI ). A further 19 new partner states are to be bindingly incorporated into the AEOI network by 2020. The first data exchange processes are to take place in 2021. Among the new partner states are countries such as Albania, Azerbaijan, Kazakhstan, Lebanon, the Maldives, Nigeria, Pakistan, Peru, Trinidad and Tobago, Turkey and some others. In the autumn and winter season this year the parliamentarians will be confronted with the corresponding federal decrees. Furthermore, the Swiss Executive Board approved the report on the review mechanism for the standard-compliant implementation of the AEOI. At the end of September 2018, information was exchanged with 36 states for the first time. At the end of September 2019, information was exchanged with 33 partner states once again.

Media release from the Federal Council of 29 May 2019

27.02.2019

On 27 February 2019, the Federal Council opened the consultation on the amendment of the Federal Act and Ordinance on the International Automatic Exchange of Information in Tax Matters (AEOI). With this procedure, the Federal Council is requesting the implementation for Switzerland of the recommendations issued by the Global Forum on Transparency and Exchange of Information on Tax purposes (Global Forum). This Global Forum has been reviewing each participating state with regard to the implementation of the AEOI standard on the key points since 2017. As part of the review of the full adoption of the AEOI rules into domestic law, recommendations were issued to Switzerland. With the consultation draft, the Federal Council is attempting to harmonise the recommendations and applicable law. Particular attention is paid to the due diligence and registration obligations as well as the document retention obligation. There are also deletions in some exemption provisions. As an example of such an exemption provision, foundations and associations that were considered financial institutions will no longer benefit from the exemption from the reporting obligation, but will be subject to the reporting obligation altogether. In the event that Switzerland does not adapt its rules to international standards, it could be qualified as an uncooperative state and thus be subject to defensive measures by other states. It is obvious that this could have a lasting negative impact on Switzerland as a business location. The consultation period lasts until 12 June 2019 - the entry into force of the revisions is planned for 1 January 2021.

See also the NZZ article of 15 March 2019 on the threat to Switzerland's "foundation paradise" by the planned changes to the AEOI .

29.01.2019

According to the NLZ article of 29 January 2019, the Cantons have so far received 940'498 reports on foreign accounts belonging to individuals taxable in Switzerland as a result of the Automatic Exchange of Information (AEOI). As shown in the graph below, the Cantons of Zurich, Aargau and Berne have been forwarded by far the most data from abroad by the federal government. It still remains to be seen how the individual Cantons will deal with this flood of data and whether all this work will pay off financially.

04.01.2019

At the beginning of January, the canton of Zurich reported a new record number of voluntary declarations filed. A total of 7,250 voluntary declarations were filed in 2018. This is an increase of approximately 1,000 reports compared to the previous year. This striking increase is attributable to the automatic exchange of information on financial accounts (AEOI) introduced in 2017. The same scenario can also be observed in other cantons, for example in the canton of Aargau. 1,182 voluntary declarations were filed there.  

07.12.2018

In a meeting on 7 December 2018, the Federal Council opened the consultation on the introduction of the automatic exchange of information on financial accounts (AEOI) with 18 additional states and territories. This expansion of the network is in line with the international requirements of the OECD for the purpose of harmonising and standardising tax transparency. A level playing field internationally is the goal of this project. The extension of the exchange is to include the remaining 18 partner states of the 107 territories that have committed to the AEOI: Albania, Azerbaijan, Brunei Darussalam, Do-minica, Ghana, Kazakhstan, Lebanon, Macao (China), Maldives, Nigeria, Niue, Pakistan, Peru, Samoa, Saint Marteen, Trinidad and Tobago, Turkey and Vanuatu. However, before the first data exchange can actually take place, the Federal Council will once again review the requirements of the AEOI standard with regard to confidentiality and data security. The amendment is scheduled to enter into force in January 2020, with the first data exchange taking place in the calendar year 2021. The consultation process will last until 20 March 2019.

07.11.2018

On 7 November 2018, the Federal Council decided to repeal the transitional provision on "participating states" (Art. 1 AEOI) in the Ordinance on the International Automatic Exchange of Information in Tax Matters. In doing so, the Federal Council is complying with a request made by the OECD in autumn 2017. A state is a participating state if it has an AEOI agreement with that state. The aforementioned regulation provided that states that have committed to the AEOI agreement but do not yet have an agreement could also be considered "participating states". The reason for the exception is obvious: not all states are expanding the AEOI regulations at the same time. With this rule, the financial institutions could reduce the effort. To date, more than 100 states follow the AEOI, which led the OECD to call for the dissolution of this rule. The Federal Council is convinced that with this repeal, the correct design of the AEOI will be realised. However, the expected effects appear to be small.

17.10.2018

The Federal Council intends to extend the exchange of country-specific reports (Country-by-Country Reporting, CbCR) to additional countries. The legal foundations for the exchange of country-specific reports (ALBAG and ALBA-agreement) entered into force for Switzerland on 1 December 2017. Since then, other states have signed the ALBA-agreement (or CbC MCAA) or joined the Inclusive Framework on BEPS. Therefore, the Federal Council has decided to submit an updated list of countries with which Switzerland will exchange country-specific reports to the OECD in December 2018. In addition, the Federal Council has adopted an amendment to the ordinance on the international automatic exchange of country-specific reports by multinational corporations (ALBAV) because the current ordinance refers to the meanwhile revised OECD guideline of 6 September 2017. The amendment will enter into force on 1 December 2018.

05.10.2018

At the end of September, the time had come: Switzerland exchanged information on financial accounts with the EU states and nine other territories for the first time. The transmission did not work straight away with all states, either for reasons of lack of data security or due to technical problems. The reports received by the FTA from the financial institutions were transmitted to the corresponding states. This involved information on around two million financial accounts. In return, the FTA itself received data and information on financial accounts in the millions. The content of the exchange is primarily account information such as the balance, investment income and information on the taxable person. Supervision of this is carried out by the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) of the OECD. This exchange from the end of September now represents the start of an annual transmission to about 80 countries.

17.09.2018

On 17 September 2018, the Council of States, as the first examining Council, discussed the message of 9 May 2018 on the introduction of the Automatic Exchange of Information on Financial Accounts with Singapore and Hong Kong as of 2018/2019 and with other partner states as of 2019/2020 and approved all Federal Decisions in accordance with the Federal Council's draft.

10.07.2018

The Swiss Federal Tax Administration (FTA) has published the circular «non-punishable voluntary self-disclosure». It outlines how the cantonal tax administrations should proceed when registering a self-disclosing taxable person in the central and nationwide register maintained by the FTA. The circular is effective as of its publication on the FTA homepage and is applicable to all notifications to be made to the FTA as of this date.

18.06.2018

The FTA sends a total of 109 country-by-country reports from multinational corporations to a total of 35 countries by the end of June. The country-by-country reports, which are exchanged within the framework of the so-called country-by-country reporting, contain, among other things, information on the worldwide distribution of income, the taxes paid and the most important economic activities of the group in various countries. This first exchange for the 2016 tax period is voluntary at the request of the respective company. The submission of the reports will become mandatory as of the 2018 tax period. It is not yet known whether the FTA will receive country-specific reports from groups domiciled in the partner states for the 2016 tax period.

09.05.2018

The Federal Council has adopted the dispatch on the approval of the agreements on the automatic exchange of information on financial accounts (AEOI) with Singapore and Hong Kong. In October 2017, the Federal Council decided to provisionally apply the agreements with Singapore and Hong Kong as of 1 January 2018 and to exchange account information with these countries for the first time in autumn 2019. With the current bill, it is now asking the Federal Assembly for authorisation to ratify the two agreements. In the same dispatch, the Federal Council is also proposing to parliament the introduction of AEOI with other financial centres (Anguilla, the Bahamas, Bahrain, Qatar, Kuwait, Nauru, Panama and the Netherlands with regard to their overseas communities of Bonaire, Saint Eustatius and Saba).

08.05.2018

The Federal Tax Administration (FTA) has for the first time transmitted information on advance tax rulings to the partner states of the spontaneous exchange of information (SIA). In a first tranche, the FTA sent a total of 82 notifications to a total of 41 states, including Germany, France, the United Kingdom, the Netherlands and Russia. Certain reports were exchanged with several partner states. Affected by this first spontaneous exchange of information are advance tax rulings that were still effective on 1 January 2018.

23.03.2018

Now that the Automatic Exchange of Information (AEOI) has slowly established itself as a global standard, the OECD wants to close possible loopholes. On 9 March 2018, the OECD published the «Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures» and, parallel to this, launched the consultation process on a further initiative to avoid AIA circumvention by means of fictitious domiciles (Preventing abuse of residence by investment schemes to circumvent the CRS) on 19 February 2018. This latter initiative should in particular target countries in which it is possible to obtain a residence permit (and thus a tax domicile) or citizenship through investment. For Switzerland this could mean that it would have to record if the residence permit was granted on the basis of fiscal interest or, if necessary, also if a person is taxed at cost.

04.01.2018

The Finance Directorate of the Canton of Zurich has published in a Media release that, due to the imminent launch of the AEOI in 2017, 6,150 taxpayers self-reported have reported themselves. This is almost three times as many taxpayers as in the previous record year of 2016 (then there were 2100 submissions). In the new year, the cantonal tax office expects to see a further a high level of voluntary declarations. In accordance with the accommodating interpretation of the tax law adopted by the Canton of Zurich Tax Office, a penalty-free voluntary disclosure is possible until the responsible tax commissioner finds a discrepancy when comparing the foreign information with that in the Zurichtax return. Zurich tax return or the tax evasion is discovered in some other way. In other cantons, too, there is the same trend towards increasing voluntary disclosures.

06.12.2017

On 5 and 6 December 2017, both the Council of States and the National Council approved the introduction of the Automatic Exchange of Information (AEOI) on financial accounts with 41 partner countries. Account information from these states and territories is to be collected from 2018 onwards and a mutual exchange of this data will take place for the first time in 2019. The National Council has thus abandoned its initial opposition regarding Saudi Arabia and New Zealand and has also agreed to the AEOI with regard to these two states.

22.11.2017

The introduction of the AEOI leads to an increasing number of self-disclosures, as the Cantons confirm. «10vor10» has published a table with the figures for the individual Cantons. In leading position is the Canton of Geneva, which has already been able to generate 500 million Swiss francs in post-tax revenue by the end of last year and expects around 10'000 self-disclosures by the end of this year.

20.11.2017

The FTA has published an information sheet regarding the Tax Identification Number for Automatic Information Exchange (AEOI). Within the framework of the AEOI, the tax identification number to be used is the AHV insurance number for natural persons resident in Switzerland and the company identification number (CID) for legal entities or other legal bodies resident in Switzerland.

18.10.2017

As part of the entry into force of the ALBA agreement in December 2017, Switzerland must notify the OECD of the countries with which it will exchange country-by-country reports. The Federal Council determined that Switzerland intends to exchange country-by-country reports with all signatory states of the ALBA agreement and all member states of the Inclusive Framework on BEPS (preliminary country list). However, the ALBA agreement between Switzerland and another state only becomes applicable when the other state also includes Switzerland on its list. In addition, the Federal Council adopted a declaration on the Administrative Assistance Convention, with which the Administrative Assistance Convention will already be applicable for the 2016 and 2017 tax years, so that the guarantees contained therein will also apply to the voluntary reports.

13.10.2017

The Federal Council has sent the agreements on the introduction of AEOI with Hong Kong and Singapore into consultation. It is expected to last until 27 January 2018. The Federal Council intends to introduce the AEOI with Singapore and Hong Kong as early as 2018 and to exchange data for the first time in 2019. To ensure that this timetable can be met, the AEOI with the two countries is to be introduced provisionally as of 1 January 2018.

05.10.2017

The referendum deadline for the Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinational Corporations of 16 June 2017 (ALBAG) has expired unused. The ALBAG will thus enter into force together with the ALBA agreement on 1 December 2017. Switzerland is thus implementing one of the global minimum standards of the BEPS project. Multinational corporations in Switzerland will be required to prepare country-by-country reports for the first time from the 2018 tax year, which Switzerland and its partner states will then exchange from 2020. For tax periods prior to 2018, groups can already submit a country-by-country report on a voluntary basis, which the Federal Tax Administration (FTA) can send to the partner states from 2018 onwards on the basis of the ALBA agreement.

29.09.2017

The Federal Council has adopted the ordinance on the International Automatic Exchange of Country-Related Reports of Multinational Corporations (ALBAV). Among other things, it specifies the content of the country-specific report and the threshold value from which companies must create country-specific reports. The Federal Council adopted the ALBAV before the ALBAG's referendum deadline expired, so that companies wishing to voluntarily submit a country-specific report for the year 2016 by the end of 2017 can do so.

15.09.2017

The FTA expresses its opinion in a release concerning the question of how the AIA affects the possibility of (non-punitive) self-disclosure. In the opinion of the FTA, it is no longer possible to make a (non-punitive) self-disclosure when the AIA enters into force (at the latest from 30 September 2018), since from this point in time all the taxpayers' data is automatically sent to the respective tax authorities and the tax authority's knowledge of the tax factors reported is therefore assumed. Consequently, the disclosure can no longer be made of one's own accord.

Critical of that: Tobias Rohner (BakerMcKenzie) is quoted in the NLZ article Will tax evaders have to pay fines in the AEOI future?

10.08.2017

The SVP calls for an immediate halt to new agreements on the automatic exchange of information.

SVP Media Conference

NLZ article: SVP takes a stand against bricklayers

16.06.2017

The Federal Council published a message regarding the Automatic Exchange of Information with 41 countries and territories. The implementation is planned for 2018, the first data shall be exchanged in 2019. But the federal decision stipulates that the Federal Council shall issue a situation report before the first Information Exchange scheduled for fall 2019.

NZZ article: The Federal Council's tranquilliser

17.01.2017

The FTA has published the definitive guidelines for the automatic exchange of information in tax matters. It describes and specifies the obligations that arise for Swiss financial institutions and other participants from the Swiss legal basis for implementing the AEOI standard.