The Swiss Federal Council announced yesterday that it had signed the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters and today published plans to make a number of revisions to its own Tax Administration Assistance Act.
In a statement, the Federal Council confirmed it would “fulfil the applicable international standard” on tax information exchange.
However, the country, which has built its reputation on its secretive banking industry, said it would continue to be a requirement that a person who is the subject of “administrative assistance proceedings” must be notified by the investigating country.
The decision was made following a consultation which ran between 14 August and 18 September this year. According to the Federal Council, the majority of those consulted voted against making any changes.
Indeed, the results of the consultation led the Federal Council to specify in its draft that deferred notification of taxpayers is possible “only in exception cases”. Furthermore, if a country does not want to notify the target, it must substantiate its request.
‘Pressure will continue to increase’
In its statement, the Swiss Federal Council also said it had looked to “break the deadlock” whereby it is unable to respond to governments which are making administrative assistance requests based on stolen data.
The Federal Council said it had wanted to ease legislation in this respect, in part so it could deal with existing requests, but also in order to create “more favourable conditions” for Switzerland with regard to the Global Forum as it looks to submit countries to “phase two” OECD peer review.
The Global Forum is part of the OECD and has been asked by the G20 to help promote and ensure the implementation of internationally agreed standards of transparency and exchange of information in the tax area.
However, the Federal Council’s proposals were once again met with strong opposition during consultation and no changes will be made to Switzerland’s current legislation.
It noted: “The Federal Council believes the revision of the Tax Administrative Assistance Act is necessary due to international developments in the area of taxation. During the summit in September 2013, the G20 members once again urged all jurisdictions to implement the Global Forum’s recommendations without delay.
“This appeal was addressed particularly to those states which, like Switzerland, have not yet been admitted to the second phase of the peer review. Moreover, the Global Forum will commence the final grading of the first 50 states which have completed both phases of the peer review this autumn.
“These final grades will have a significant impact internationally. So long as Switzerland has not passed the first two phases of the peer review, the pressure will continue to increase, bringing with it the growing risk of black lists and other bilateral and multilateral sanctions.”
