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Switzerland Caught Napping On AEI Developments

by Ulrika Lomas,, Brussels

25 February 2014

The Confederation has been caught out by the speed with which the Organisation for Economic Cooperation and Development (OECD) finalized details of its new standard on automatic information exchange in tax matters, Swiss Finance Minister Eveline Widmer-Schlumpf has conceded.

In an interview with NZZ, Finance Minister Widmer-Schlumpf explained that there is now very little time to resolve outstanding matters with European Union (EU) member states that are of the utmost importance for Switzerland, namely securing market access and regularizing undeclared "old" money held in Swiss banks. Switzerland must therefore act quickly to assert its position, Widmer-Schlumpf said.

Given that an automatic exchange of information (AEI) mechanism ensures that all foreign assets are disclosed in the future, Switzerland still intends to reach a comprehensive agreement on the problem of past, hitherto untaxed foreign assets, in particular with Germany, Italy, and France, the Minister said.

Confirming that the Governments of these neighboring states are open to talks, Widmer-Schlumpf said there are still problems preventing a swift resolution, notably the change of government in Italy, the dispute with France over a bilateral inheritance tax agreement, and the fact that Germany has ruled out the option of a withholding tax deal.

The Group of Twenty nations (G20) is expected to adopt the OECD's new AEI standard in September. Switzerland intends to submit a bill to parliament in 2015, setting out how the Federation will introduce the mechanism and with which states. Furthermore, provision will be made for countries where no AEI is in place. Widmer-Schlumpf said that Switzerland should act before all countries have introduced the system.

TAGS: compliance | tax | tax compliance | tax avoidance | Organisation for Economic Co-operation and Development (OECD) | transfer pricing | France | Germany | Italy | Switzerland | G20 | individual income tax | European Union (EU) | Europe | Tax | Tax Evasion

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