Switzerland prepared to conclude tax information exchange agreements

In its meeting on 4 April 2012, the Federal Council took the decision to agree to the international standard on administrative assistance not only in double taxation agreements, but also in so-called tax information exchange agreements (TIEAs)

With this decision, Switzerland is complying with a request from the Global Forum on Transparency and Exchange of Information for Tax Purposes, as well as agreeing to mutual administrative assistance in accordance with the international standard with interested countries and territories with which no economic interest exists in concluding an extensive double taxation agreement (DTA). DTAs and TIEAs are in principle equivalent instruments for the agreement of standard-compliant administrative assistance provisions. However, DTAs are more extensive and primarily regulate the avoidance of double taxation.

At the same time, the Federal Council approved a report drawn up by the Federal Department of Finance (FDF) in cooperation with the Federal Department of Foreign Affairs (FDFA) on the possibility of arranging information agreements of this nature with developing countries. This report was commissioned by parliament and it has now been submitted to the Economic Affairs and Taxation Committee (EATC) of each chamber.

Amongst other things, this report concludes that it could make sense for Switzerland to conclude tax agreements with developing countries. A contribution could thereby be made to preventing illegal flows of capital and strengthening the integrity of Switzerland’s financial centre.