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Swiss Lawmakers Approve US Info Exchange Amendment

by Ulrika Lomas,, Brussels

15 November 2011

The Swiss Foreign Affairs Committee of the Council of States, Switzerland’s upper house of parliament, has recently adopted a federal decree pertaining to an amendment to the 2009 bilateral double taxation agreement (DTA) in place between Switzerland and the US.

Intended to clarify the existing DTA, and to allow a broader reach, the amendment provides for the identification of US citizens alleged to have evaded taxes in Swiss bank accounts, based on patterns of behaviour, in cases where the name and bank details of the account holders are not known by the US tax authorities.

The amendment was approved by seven votes to three with two abstentions.

In accordance with the new provision, the Confederation will, however, only grant administrative assistance in tax matters in cases where there is clear evidence of a suspected offence.

The US authorities will be required to explain the pattern of behaviour and to clarify why the information is needed.

In September 2009, Switzerland and the US signed a protocol updating the existing income tax treaty between the two countries to allow for greater tax information exchange.

The 2009 protocol revised the existing US-Switzerland income tax treaty to allow for the exchange of information for income tax purposes to the full extent permitted by Article 26 of the Organization for Economic Cooperation and Development Model Income Tax Convention.

The protocol also provided for mandatory arbitration of certain cases and addressed issues around the cross-border taxation of individual retirement accounts.

Commenting on the agreement at the time, the Swiss authorities emphasized that any request for administrative assistance must "clearly identify the taxable person concerned" and, in the case of banking information, the bank concerned. The authorities underscored that the protocol does not allow the authorities to undertake "fishing expeditions".

The new agreement, which is due to be examined by both chambers of parliament in December, also requires the backing of the US Senate.

A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at and a description of the report can be seen at
TAGS: tax | offshore confidentiality | double tax agreement (DTA) | banking | international financial centres (IFC) | Organisation for Economic Co-operation and Development (OECD) | offshore | agreements | offshore banking | banking secrecy | Switzerland

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