Requirements for administrative assistance in tax matters are to be revised
Bern, 15.02.2011 - Identifying the taxpayer and the holder of the information is an indispensable prerequisite for the granting of administrative assistance. In most cases, this occurs by indicating the name and address. Other means of identification should also be admissible in the future. Switzerland thereby eliminates a foreseeable obstacle to the effective exchange of information in tax matters and reduces the risk of failure in the peer review process. Fishing expeditions continue to be impermissible.
The administrative assistance provisions in double taxation agreements (DTAs) are to be revised in this spirit. In the DTA negotiations up to now, Switzerland has assumed that the structure of the Federal Council's key points on the ban on fishing expeditions, whereby the name and address of not only the taxpayer but also the holder of the information (e.g. a bank) is required in the administrative assistance request, was OECD compliant. This assessment was not confirmed, as initial signals from the peer review process show.
The Global Forum on Transparency and Exchange of Information for Tax Purposes examines compliance with the administrative assistance standard in countries affiliated to it by means of peer reviews. The first phase of Switzerland's peer review started at the end of October 2010. It was discovered in this context that Switzerland's requirements for administrative assistance, which were deemed to be appropriate up to now, are too restrictive and could prove to be a possible hindrance to an effective exchange of information. In order to pass the first phase of the peer review, the requirements on identifying the taxpayer and the holder of the information should therefore be revised accordingly. With the revision, Switzerland is in line with the globally applicable standard, without going beyond it. Even the competitors to Switzerland as a financial centre must meet the same minimum conditions. In this way, a level playing field is achieved, which means that the same conditions apply to all countries and territories.
Identifying the taxpayer and the holder of the information in administrative assistance requests will generally continue to be by indicating the name and address. The revision should merely underline that administrative assistance procedures should not be doomed to failure because of the DTA provisions being interpreted too formally and that other means of identification should be admissible. Identification via a bank account is also a possibility, although care should be taken in these cases to ensure that a fishing expedition is not involved.
With the revision of the requirements on administrative assistance, the key points decided by the Federal Council on 13 March 2009 for implementing Switzerland's new administrative assistance policy remain unchanged in principle. However, the Federal Council is aware that the wish was expressed in the parliamentary debates that administrative assistance be permitted only if the name and address of the person and the information holder concerned are indicated in the request. This is why the revision decided will also be submitted to parliament. The first opportunity to do so will be provided with the ten DTAs pending before the National Council.
Address for enquiries
Urs Ursprung, Director, Federal Tax Administration, tel.: +41 31 322 71 01
Beat Furrer, Head of Communications, Federal Tax Administration, tel.: +41 31 324 91 29
Documents
Publisher
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html
