Swiss Federal Council Outlines Its Position On Information Exchange

by Ulrika Lomas, Tax-News.com, Brussels

11 March 2009

At its meeting on March 6, the Swiss Federal Council maintained that the privacy of bank customers (banking secrecy) would remain intact, but did however urge that it was eager to improve cooperation with other countries in the area of tax offences, and that it would be open to discussion surrounding the taxation of savings income.

According to a release from the Federal Council, its meeting on March 6 focused on threats and criticisms directed at Switzerland by various countries concerning the exchange of information on tax issues. In response the Federal Council had this to say:

“The Federal Council considers this criticism to be unjustified. Switzerland is not a tax haven. It has an efficiently-functioning tax system and imposes normal taxes while striving to maintain competitive rates. The Federal Council stated once again today that Switzerland has concluded a number of bilateral and multilateral agreements which provide a basis in law for an exchange of information for tax purposes between Switzerland and other states. The Federal Council stated that Switzerland complies with its contractual obligations.”

“The need for appropriate protection of privacy of citizens from unwarranted state intervention is deeply rooted among the Swiss population. This also applies to protecting the privacy of bank customer data. Consequently, the Federal Council will continue to retain banking secrecy. However, the purpose of banking secrecy is not to provide cover for tax offences. Tax offences are also liable to prosecution in Switzerland,” urged the Federal Council.

“The Federal Council has therefore taken the decision to optimise international cooperation with other countries in the case of tax offences. In addition it is prepared to enter into dialogue with third countries on the taxation of savings income. In so doing, the Federal Council will strive to ensure that the Swiss financial centre can compete on the international markets on the same terms so as to prevent it from experiencing competitive disadvantages.”

“To deal with issues on optimising cooperation in the case of tax offences, the Federal Council today set up a group of experts chaired by Ambassador Manuel Sager. The group supports and advises the Federal Council committee and has no decision-making powers. The formulation and implementation of measures within the scope of the strategy approved today will occur in accordance with the usual responsibilities and procedures”.

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