Federal Council decides to sign administrative assistance convention and adopts draft mandate on taxation of savings income with EU
Bern, 09.10.2013 - During its meeting today, the Federal Council took further measures to implement its financial market policy in the area of taxation. It approved the signing of the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters. In addition, it adopted a draft mandate for negotiations regarding a revision of the taxation of savings agreement concluded with the European Union (EU).
Switzerland has been committed to complying with international standards in tax matters since March 2009. The signing of the OECD/Council of Europe convention underscores Switzerland's willingness to conform to these standards. It also confirms Switzerland's commitment to the global fight against tax fraud and tax evasion with a view to safeguarding the integrity and reputation of the country's financial centre.
Over 50 countries have signed the convention to date, and it is already in force in approximately 30 countries. The multilateral convention provides a framework for tax cooperation between states. Its modular system provides for multiple forms of cooperation in the area of taxation, including the exchange of information upon request and spontaneously. The automatic exchange of information is also one of the options foreseen in the convention, but this type of assistance expressly requires an additional agreement between the states involved.
The convention will go through the standard approval process: consultation of interested parties, Federal Council dispatch to parliament, approval by parliament and optional referendum. The Federal Council has instructed the Federal Department of Finance (FDF) to present a consultation draft after the signing.
Revision of the taxation of savings agreement
In addition, the Federal Council has adopted a draft mandate for negotiations regarding a revision of the taxation of savings agreement concluded between Switzerland and the EU. This decision follows the mandate adopted by the ECOFIN Council (Council of EU finance ministers) on 14 May 2013 enabling the European Commission to negotiate an amendment of the taxation of savings agreements concluded with Switzerland and third countries. The EU's aim is to ensure that these agreements are in line with the planned revision of the European Union Savings Directive.
Switzerland has been willing to discuss a revision of the agreement with a view to eliminating the existing loopholes since 2009. However, an amendment of the agreement should be agreed only if within the framework of MiFID a satisfactory solution is found with respect to how the regulation of third country regimes is structured for the provision of cross-border financial services.
The draft mandate, prepared by the FDF in collaboration with the Federal Department of Foreign Affairs (FDFA), is being submitted for consultation to the competent parliamentary committees and to the cantons. The Federal Council will then adopt the definitive mandate, whereupon Switzerland will be able to commence negotiations with the EU. The content of the mandate remains confidential.
Address for enquiries
Mario Tuor, Head of Communications, State Secretariat for International Financial Matters SIF,
tel. +41 31 322 46 16
FDFA information, tel. +41 31 322 31 53, email@example.com