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Swiss State Council Backs US Tax Deal Amendment

by Ulrika Lomas,, Brussels

16 December 2011

After having dragged its heels, Switzerland’s State Council finally voted in favour recently of plans to provide mutual assistance to the US authorities in cases of alleged tax evasion involving group requests, based on patterns of behaviour in the absence of specific account details.

The latest decision marks a dramatic about-turn, as the State Council initially withheld support for the plans in the autumn session.

The upper chamber voted by a large majority in favour of the proposed changes to the existing bilateral double taxation agreement (DTA) in place between the US and the Confederation, by 27 votes to 5, with 4 abstentions.

In accordance with the new provisions, which aim to resolve the continuing dispute with the US and a number of Swiss banks, mutual assistance will be granted not only in cases of suspected tax fraud, but also in cases of presumed tax evasion.

Federal Councillor Eveline Widmer-Schlumpf provided her assurances that Switzerland would not allow the US authorities to undertake so-called “fishing expeditions”, however.

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.

The amendments have yet to be approved by the Swiss National Council, or lower house.

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 | investment | offshore confidentiality | double tax agreement (DTA) | banking | offshore | agreements | offshore banking | banking secrecy | Switzerland | mutual assistance agreement

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