The work of the OECD on the new global standard for the automatic exchange of information in tax matters will probably be finalised in June 2014. On 6 May 2014, the ministers of the OECD member states and a few other countries published a declaration confirming this objective. Switzerland also expressly supported this declaration. The OECD Council should approve the new standard in July and the G20 nations should confirm this in September 2014.
It is important for the Federal Council that the requirements which it adopted in June 2013 are contained in the new standard. There is to be only one global standard, the exchanged information should be used solely for the agreed purpose (principle of speciality), the information should be reciprocal, i.e. should flow in both directions, data protection must be ensured and the beneficial owners of trusts and other financial constructs should also be identified. Moreover, the Federal Council stated that, where appropriate, the issues of regularisation of the past and market access are to be incorporated into negotiations on the automatic exchange of information.
In general terms, the introduction of the automatic exchange of information should create a level playing field and Switzerland's reputation and that of its financial centre in the area of taxation and thereby overall competitiveness should be improved.
In the draft mandate, the Federal Council specifically recommends taking the following steps in the further course of action:
- The introduction of the exchange of information is to be negotiated with the EU such that the ongoing negotiations on extending the EU savings tax agreement will be reorientated.
- Regarding implementation of the Foreign Account Tax Compliance Act (FATCA), a switch from Model 2 to Model 1 should be negotiated with the United States. With the new agreement, data would be exchanged automatically between the competent authorities on a reciprocal basis.
- Negotiations on the automatic exchange of information with other selected countries are to be examined. In an initial phase, priority would be given to the introduction of the automatic exchange of information with countries with which there are close economic and political ties and which, if appropriate, provide their taxpayers with sufficient scope for regularisation and which are considered to be important and promising in terms of their market potential for Switzerland's finance industry.
- The introduction of the automatic exchange of information with foreign countries would be conducted by means of separate bilateral agreements with the partner countries. Moreover, implementing legislation would be required in national law. Existing legislation excludes the automatic exchange of information.
The authorities will carry out the work necessary for the introduction in collaboration with the financial sector. In the coming months, consultations on the Federal Council's drafts will be conducted with the relevant parliamentary committees and the cantons. The mandates should be definitively adopted by the Federal Council at the start of autumn. The results of the negotiations and specific legislative proposals will be submitted to parliament later.
Address for enquiries:
Mario Tuor, Head of Communications, State Secretariat for International Financial Matters SIF
Tel. +41 31 322 46 16, mario.tuor@sif.admin.ch
