Recent developments concerning the international exchange of tax-relevant data


At its meeting on 20 November 2019, the Federal Council adopted the dispatch on the amendment of the Federal Act on the International Automatic Exchange of Information in Tax Matters (AEOIA). The aim of the draft is to implement the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes. Since the start of Swiss implementation of the AEOI standard on 1 January 2017, the Global Forum has been checking compliance by means of country reviews. On the basis of the recommendations received, the Federal Council approved the consultation of a corresponding proposal at the end of February 2019. Finally, the consultation participants had time until the end of June 2019 to submit their comments. The majority approved the law's proposals. The only criticism at ordinance level was the planned repeal of the exemption provisions for associations and foundations. The Federal Council has now refrained from doing so. In the 2020 spring session, the Federal Assembly will discuss this for the first time.


Media release of the Federal Council of 20 November 2019



About one year after the first international exchange of information on financial accounts (AEOI), a second exchange took place at the beginning of October. Switzerland exchanged information with 63 countries. The remaining 12 states provided data to Switzerland but did not receive any from Switzerland in return. The reason for this one-sidedness was either the non-compliance with confidentiality and data protection requirements or the failure of these states to provide information. The financial exchange affected information on a total of 3.1 million financial accounts sent abroad by Switzerland, while Switzerland received data on 2.4 million financial accounts from abroad. Most of the data went or came to/from Germany. 
Media release of the Federal Tax Administration of 7 October 2019


At the State Council meeting of 14 August 2019, a motion was submitted to the government of Berne concerning the exchange of financial data within Switzerland. The motion was accepted by the

members of the government, but they rejected the request for urgent procedure. The State Council will ask the members of the Grand Council to accept this motion. After successful acceptance by the Grand Council, the latter will decide whether to submit a parliamentary motion to the Confederation.


Government meeting of 14 August 2019


Article in the Berner Zeitung of 19 August 2019


In its session of 29 May 2019, the Federal Council issued the message on the extension of the Automatic Exchange of Information on Financial Accounts (AEOI). A further 19 partner states are to be included in the AEOI network as of 2020. The first data exchange procedures are to take place in 2021. The new partner states include countries such as Albania, Azerbaijan, Kazakhstan, Lebanon, the Maldives, Nigeria, Pakistan,

Peru, Trinidad and Tobago, Turkey and several others. In the autumn and winter sessions of this year, parliamentarians will be confronted with the relevant federal decisions. In addition, the Swiss executive has approved the report on the review mechanism for the standard-compliant implementation of the AEOI. At

the end of September 2018, information was exchanged with 36 states for the first time. At the end of September 2019, information will once again be exchanged with 37 partner states.


Media release of the Federal Council of 29 May 2019


On 27 February 2019, the Federal Council opened the consultation processes on the amendment of the Federal Act as well as the Ordinance concerning the International Automatic Exchange of Information in Tax

Matters (AEOI). With this procedure, the Federal Council seeks the implementation of the recommendations which the Global Forum on Transparency and Exchange of Information on Tax Purposes (Global Forum) has issued for Switzerland. This Global Forum examines each participating state with regard to the imple-mentation of the AEOI standard’s key points since 2017. Several recommendations were made to Switzer-land in the course of examining how to fully integrate the AEOI rules into national law. With the consultation draft, the Federal Council seeks to harmonise the recommendations and applicable law. Particular attention is paid to due diligence and registration obligations as well as the obligation to retain documents. Some ex-emption clauses are to be eliminated. As an example, foundations and associations which have been regar-ded as financial institutions will in future no longer benefit from the exemption from the reporting obligation but will be required to report in full. If Switzerland does not adapt the local rules to the international stand-ards, there is a risk of being qualified as an uncooperative state and thus the possibility of defensive mea-sures by other states. It is obvious that this could have a lasting negative impact on Switzerland as a busi-ness location. The consultation process will last until 12 June 2019 - the revisions are scheduled to enter into force on 1 January 2021.


See also the NZZ article of 15 March 2019 on the threat posed to the so-called "foundation paradise"

Switzerland by the planned changes to the AEOI.


According to the NLZ article of 29 January 2019, the cantons have so far received 940'498 reports on foreign accounts belonging to individuals taxable in Switzerland as a result of the Automatic Exchange of Information (AEOI). As shown in the graph below, the Cantons of Zurich, Aargau and Berne have been forwarded by far the most data from abroad by the federal government. It still remains to be seen how the individual cantons will deal with this flood of data and whether all this work will pay off financially.

Bucher Tax AG, Steuern, taxes, AEOI, AIA, tax planning, BEPS, OECD, EU, Switzerland, cantons, tax consultant, international developments, intercantonal exchange, tax data exchange, new tax rules, new tax practice


At the beginning of January, the Canton of Zurich reported a new record regarding the number of submitted

self-disclosures. A total of 7'250 self-disclosures were submitted in the year 2018. Compared to the previous year, this represents an increase of approximately 1'000 disclosures. This striking increase can be attributed to the Automatic Exchange of Information on Financial Accounts (AEOI) introduced since 2017. The same scenario can also be observed in other cantons, such as the canton of Aargau. 1'182 self-disclosures were submitted there.


In a meeting on 7 December 2018, the Federal Council opened the consultation on the introduction of the Automatic Exchange of Information on Financial Accounts (AEOI) with a further 18 states and territories. This extension of the Network is in line with the international guidelines of the OECD for the harmonisation

and standardisation of tax transparency. The aim of this project is to create equal conditions in the interna-tional community. The expansion of the Exchange is to include the remaining 18 partner states of the 107 territories that have committed themselves to the AEOI: Albania, Azerbaijan, Brunei Darussalam, Dominica, Ghana, Kazakhstan, Lebanon, Macao (China), Maldives, Nigeria, Niue, Pakistan, Peru, Samoa, Saint Mar-teen, Trinidad and Tobago, Turkey and Vanuatu. However, before an initial exchange of data can take place, the Federal Council will once again review the requirements of the AEOI standard with regard to

confidentiality and data security. The amendment is due to enter into force in January 2020, with the first data exchange taking place in the 2021 calendar year. The consultation process will last until 20 March 2019.


On 7 November 2018, the Federal Council decided to repeal the transitional provision regarding the «Participating States» (Art. 1 AIAV) in the Ordinance on the International Automatic Exchange of Information in Tax Matters. Thus, the Federal Council complies with a demand of the OECD made in autumn 2017. In order for a state to be considered a participant, it must have an AEOI agreement in place. The aforementioned provision provided that also states that had committed themselves to the AEOI agreement, but did not yet have an agreement, could be regarded as «Participating States». The reason for the exception is obvious: not all states are implementing the AEOI regulations at the same time. With this rule, financial institutions were able to reduce expenditure. To date, more than 100 countries adhere the AEOI, which led the OECD to call for this rule to be abolished. The Federal Council is convinced that the abolition will ensure that the correct structuring of the AEOI is implemented. However, the expected effects appear to be minimal.


The Federal Council intends to extend the exchange of country-specific reports (Country-by-Country Reporting, CbCR) to additional countries. The legal foundations for the exchange of country-specific reports (ALBAG and ALBA-agreement) entered into force for Switzerland on 1 December 2017. Since then, other states have signed the ALBA-agreement (or CbC MCAA) or joined the Inclusive Framework on BEPS. Therefore, the Federal Council has decided to submit an updated list of countries with which Switzerland will exchange country-specific reports to the OECD in December 2018. In addition, the Federal Council has adopted an amendment to the ordinance on the international automatic exchange of country-specific reports by multinational corporations (ALBAV) because the current ordinance refers to the meanwhile revised OECD guideline of 6 September 2017. The amendment will enter into force on 1 December 2018.


At the end of September, the time had come: For the first time, Switzerland exchanged information on finan-cial accounts with the EU states and nine other territories. The transfer did not work straightaway with all countries, either for reasons relating to the lack of data security or due to technical problems. The reports received by the FTA from the financial institutions were forwarded to the corresponding states. Information on some two million financial accounts was provided. In return, the FTA itself received data and information on several million financial accounts. The main content of the exchange consists of account information such as the balance, capital income and personal details of the taxable person. The supervision of this process is carried out by the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) of the OECD. This exchange at the end of September marks the beginning of an annual transmission to some 80 countries.



The Swiss Federal Tax Administration (FTA) has published the circular «non-punishable voluntary self-disclosure». It outlines how the cantonal tax administrations should proceed when registering a self-disclosing taxable person in the central and nationwide register maintained by the FTA. The circular is effective as of its publication on the FTA homepage and is applicable to all notifications to be made to the FTA as of this date.


Until the end of June, the FTA will send a total of 109 country-specific reports from multinational corporations to a total of 35 states. The country-specific reports, which are exchanged within the framework

of the so-called country-by-country reporting, include information on the worldwide distribution of income, the taxes paid and the corporation's main business activities in various countries. This first exchange for the 2016 tax period takes place voluntarily at the request of the respective corporation. The submission of the reports will become mandatory as of the 2018 tax period. It is not yet known whether the FTA in turn will receive country-specific reports from corporations based in the partner states for the 2016 tax period.


The Federal Council has issued its message regarding the approval of the agreements on the Automatic Exchange of Information on financial accounts (AEOI) with Singapore and Hong Kong. In October 2017, the

Federal Council decided to apply the agreements with Singapore and Hong Kong provisionally as of
1 January 2018 and to exchange account information with these countries for the first time in autumn 2019. With its current proposal, the Federal Council is now asking the parliament to authorise the ratification of the two agreements. In the same message, the Federal Council is also proposing the introduction of the AEOI with other financial centres (Anguilla, the Bahamas, Bahrain, Qatar, Kuwait, Nauru, Panama and the Netherlands with regard to their overseas municipalities Bonaire, Saint Eustatius and Saba) to the parliament.


The Federal Tax Administration (FTA) has for the first time submitted information on preliminary tax assessments to the partner states of the Spontaneous Exchange of Information (SEOI). In a first tranche, the FTA sent 82 reports to a total of 41 countries, including Germany, France, the United Kingdom, the Netherlands and Russia. Certain reports were exchanged with several partner states. This first spontaneous exchange of information affects preliminary tax assessments that were still effective on 1 January 2018.


Now that the Automatic Exchange of Information (AEOI) has slowly established itself as a global standard, the OECD wants to close possible loopholes. On 9 March 2018, the OECD published the «Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures» and, parallel to this, launched the consultation process on a further initiative to avoid AIA circumvention by means of fictitious domiciles (Preventing abuse of residence by investment schemes to circumvent the CRS) on 19 February 2018. This latter initiative should in particular target countries in which it is possible to obtain a residence permit (and thus a tax domicile) or citizenship through investment. For Switzerland this could mean that it would have to record if the residence permit was granted on the basis of fiscal interest or, if necessary, also if a person is taxed at cost.


The Finance Department of the Canton of Zurich has published a press release which states that due to the imminent start of the AIA, 6'150 taxpayers have practiced self-disclosure in 2017. That are almost three times as many taxpayers as in the record year of 2016 (there were 2100 self-disclosures in that year). The Cantonal Tax Office also expects a high number of self-disclosures in the new year. According to the accommodating interpretation of the tax law adopted by the tax office of the Canton of Zurich, it is possible to make a non-punishable voluntary disclosure until the competent tax commissioner comes across any discrepancies whilst comparing the foreign data with the data in the Zurich tax declaration or until any tax evasion is otherwise discovered. Also in other cantons, there is a similar tendency towards increasing self-disclosures.


On 5 and 6 December 2017, both the Council of States and the National Council approved the introduction of the Automatic Exchange of Information (AEOI) on financial accounts with 41 partner countries. Account information from these states and territories is to be collected from 2018 onwards and a mutual exchange of this data will take place for the first time in 2019. The National Council has thus abandoned its initial opposition regarding Saudi Arabia and New Zealand and has also agreed to the AEOI with regard to these two states.


The introduction of the AEOI leads to an increasing number of self-disclosures, as the cantons confirm. «10vor10» has published a table with the figures for the individual cantons. In leading position is the canton of Geneva, which has already been able to generate 500 million Swiss francs in post-tax revenue by the end of last year and expects around 10'000 self-disclosures by the end of this year.


The FTA has published an information sheet regarding the Tax Identification Number for Automatic Information Exchange (AEOI). Within the framework of the AEOI, the tax identification number to be used is the AHV insurance number for natural persons resident in Switzerland and the company identification number (CID) for legal entities or other legal bodies resident in Switzerland.


As part of the implementation of the ALBA agreement in December 2017, Switzerland must disclose the countries with which it will exchange Country-by-Country Reports to the OECD. The Federal Council determined that Switzerland wants to exchange Country-by-Country Reports with all signatories of the ALBA Agreement and all member states of the Inclusive Framework on BEPS (preliminary list of countries). However, the ALBA-Agreement between Switzerland and another country will only become applicable if the other country also lists Switzerland on its list. In addition, the Federal Council adopted a declaration on the Administrative Assistance Convention, which makes the Administrative Assistance Convention applicable for the tax years 2016 and 2017, so that the guarantees contained therein also apply to voluntary reports.


The Federal Council has submitted the agreements on the introduction of the AEOI with Hong Kong and Singapore to consultation. It is to last until 27 January 2018. The Federal Council intends to introduce the AEOI with Singapore and Hong Kong by 2018 and to exchange data for the first time in 2019. In order to meet this timetable, the AEOI with the two countries shall be provisionally introduced as of 1 January 2018.


The referendum deadline of the Federal Act on the International Automatic Exchange of Country-Related Reports of Multinational Corporations of 16 June 2017 (ALBAG) expired unused. Therefore, the ALBAG will enter into force together with the ALBAV on 1 December 2017. Switzerland is thereby implementing one of the global minimum standards of the BEPS project. For the first time, from the tax year 2018 onwards, multinational corporations in Switzerland will be obliged to prepare country-specific reports, which Switzerland and its partner countries will then exchange as of 2020. For tax periods prior to 2018, corporations can already submit a country-related report on a voluntary basis, which the Federal Tax Administration (FTA) can submit to the partner countries as of 2018 on the basis of the ALBA agreement.


The Federal Council has adopted the ordinance on the International Automatic Exchange of Country-Related Reports of Multinational Corporations (ALBAV). Among other things, it specifies the content of the country-specific report and the threshold value from which companies must create country-specific reports. The Federal Council adopted the ALBAV before the ALBAG's referendum deadline expired, so that companies wishing to voluntarily submit a country-specific report for the year 2016 by the end of 2017 can do so.


The FTA expresses its opinion in a communication concerning the question of how the AIA affects the possibility of (non-punitive) self-disclosure. In the opinion of the FTA, it is no longer possible to make a (non-punitive) self-disclosure when the AIA enters into force (at the latest from 30 September 2018), since from this point in time all the taxpayers' data is automatically sent to the respective tax authorities and the tax authority's knowledge of the tax factors reported is therefore assumed. Consequently, the disclosure can no longer be made of one's own accord.

Critical comment: Tobias Rohner (Baker McKenzie) quoted in the NLZ article: Will tax evaders henceforth always have to pay fines with the AIA being in place?


The Swiss People's Party (SVP) demands the immediate halt for new treaties concerning the Automatic Exchange of Information.


The Federal Council published a message regarding the Automatic Exchange of Information with 41 countries and territories. The implementation is planned for 2018, the first data shall be exchanged in 2019. But the federal decision stipulates that the Federal Council shall issue a situation report before the first Information Exchange scheduled for fall 2019.


The Federal Tax Administration (FTA) has published the definitive directive for the Automatic Exchange of Information. It describes and substantiates the obligations that arise for Swiss financial institutions and other parties involved as a result of Switzerland's legal bases for the implementation of AEOI-standards.