INTERNATIONAL TAX PLAZA - Swiss Federal Council initiates consultation on revision of the Tax Administrative Assistance Act

Details: Published: 02 September 2015

(September 2, 2015)

On September 2, 2015 the Swiss Federal Council issued a press release announcing that on the same day it initiated the consultation proceedings on the revision of the Tax Administrative Assistance Act, which provides for an easing of Swiss practices with regard to stolen data. The consultation will last until December 2, 2015. According to the press release the bill is due to be discussed in the Swiss Parliament in summer 2016.

According to the press release after the revision it should be possible to respond to requests if a foreign country has obtained the stolen data via normal administrative assistance channels or from public sources. However, administrative assistance is still not possible if a country has actively acquired the stolen data outside of administrative assistance proceedings. The proposed legislative amendment will clarify the legal situation while also taking account of international developments.

The Federal Council has previously proposed easing administrative assistance practices in the case of stolen data in 2013 with the first revision of the Tax Administrative Assistance Act. However, according to the press release the majority of the cantons, parties and business associations rejected the proposal in the consultation on that occasion. The press release continues by stating that since then, international practice has established that exceptions to the exchange of information will be tolerated only on a very restricted basis. According to the Swiss Federal Council for instance, the exchange of information could be refused if it is incompatible with public policy, such as in the case of requests motivated by racist, political or religious persecution.

The Federal Council states that Swiss practices were increasingly called into question by numerous countries and the Global Forum. The Federal Council is thus clarifying the legal situation and taking account of international requirements with the proposed legislative amendment. According to the Swiss Federal Council, Switzerland will find itself in a better position for phase 2 of the Global Forum peer review on administrative assistance in tax matters.

The press release finishes by stating that although Switzerland will continue to reject administrative assistance requests based on stolen data actively acquired by the requesting state outside of administrative assistance proceedings, it intends to respond to requests in the future that are based on data that has been obtained by the requesting state through normal administrative assistance channels or from public sources and that has not been actively acquired in any other way. Nevertheless, the foreign taxpayers concerned will retain their legal right to lodge an appeal against the exchange of bank client data within the framework of administrative assistance.

Attached to the press release were:

· Law Proposal (German, French, Italian);

· Explanatory report regarding revising the Tax Administrative Assistance Act (Stolen Data) (German, French, Italian);