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Switzerland Strengthens Mutual Tax Assistance Service

by Ulrika Lomas, Tax-News.com, Brussels

06 November 2012


The Swiss service responsible for information exchange in tax matters (SEI), established within the Confederation’s tax administration, is to be strengthened via the deployment of additional personnel to ensure that Switzerland continues to fulfil its international obligations in terms of mutual assistance.

To ensure that the Confederation is able to cope with the dramatic increase in requests for mutual assistance both efficiently and lawfully, the Swiss Federal Council has tasked the Federal Department of Finance (FDF) with creating eight new positions from 2013.

On March 13, 2009, the Federal Council agreed to adopt the Organization for Economic Cooperation and Development’s (OECD) international standard on mutual assistance and to anchor the provision in bilateral double taxation agreements (DTAs). Since then, 25 DTAs containing the internationally agreed standard have entered into force, allowing 25 countries the possibility of submitting requests for tax information under the terms of the provision.

According to the FDF, many countries have already made use of the measure, which has led to a significant increase in requests for mutual assistance this year. Since 2011, requests for information have more than doubled, the FDF notes.

In order to deal with requests for mutual assistance submitted by foreign tax authorities, the SEI was set up last year within the tax administration. The SEI also assists the country’s judicial authorities in the treatment of requests for legal assistance in tax matters and is responsible for submitting Swiss requests for mutual assistance to foreign tax authorities.

The FDF highlights the fact that the SEI not only handles requests for tax information in accordance with the OECD standard, but also exchanges information under the terms of the Confederation’s “old law”, to ensure application of double tax treaty provisions and to enforce domestic law in cases of fraud.

In 2011, Switzerland received 99 requests for information under the international standard. The number stood at 556 as of October 2012. The total number of requests for information submitted by foreign tax authorities (under the terms of both the old law and the internationally-accepted standard) stood at 370 last year and at 704 in October this year.

In contrast, Switzerland submitted just one request for information to foreign tax authorities last year and has submitted just two requests to date this year.

TAGS: compliance | Finance | tax | offshore confidentiality | double tax agreement (DTA) | tax compliance | tax avoidance | law | banking | Organisation for Economic Co-operation and Development (OECD) | offshore | agreements | banking secrecy | Switzerland | mutual assistance agreement

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