(August 12, 2015)
The Swiss Federal Department of Finance has issued a press release announcing that on August 10, 2015 Switzerland and Belize signed a tax information exchange agreement (TIEA). Although signed, the TIEA has not yet entered into force. For the TIEA to enter into force, the respective ratification procedures have to have been finalized in both countries.
The TIEA arranges for the exchange of information upon request.
Below we will discuss a selection of regulations included in the TIEA of which we think they might interest our readers.
Based on Article 3, paragraph 1 of the TIEA (“Taxes Covered”) the taxes which are the subject of the TIEA are:
a) in Switzerland,
i) the federal, cantonal and communal taxes on income (total income, earned income, income from capital, industrial and commercial profits, capital gains, and other items of income);
ii) the federal, cantonal and communal taxes on capital;
iii) the cantonal and communal inheritance and gift taxes;
b) in Belize,
i) the income tax, including surtax or surcharge;
ii) the business tax;
iii) the general sales tax
Paragraph 2 of Article 3 of the TIEA subsequently arranges that the TIEA shall apply to any identical taxes imposed after the date of signature of the TIEA in addition to or in place of the existing taxes. It furthermore arranges that the TIEA shall also apply to any substantially similar taxes imposed after the date of signature of the TIEA in addition to or in place of the existing taxes if the competent authorities of the Contracting Parties so agree.
Article 5 of the TIEA (“Exchange of Information Upon Request”) contains regulations regarding the Exchange of Information upon Request. Paragraph 5 of Article 5 of the contains regulations regarding the information to be included in the request for information. Paragraph 5 of Article 5 reads as follows:
“The competent authority of the requesting Party shall provide, in writing, the following information to the competent authority of the requested Party when making a request for information under the Agreement to demonstrate the foreseeable relevance of the information to the request:
a) the identity of the person under examination or investigation;
b) the period of time for which the information is requested;
c) a statement of the information sought including its nature and the form in which the requesting Party wishes to receive the information from the requested Party;
d) the tax purpose for which the information is sought;
e) grounds for believing that the information requested is held in the requested Party or is in the possession or control of a person within the jurisdiction of the requested Party;
f) to the extent known, the name and address of any person believed to be in possession of the requested information;
g) a statement that the request is in conformity with the law and administrative practices of the requesting Party, that if the requested information was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain the information under the laws of the requesting Party or in the normal course of administrative practice and that it is in conformity with this Agreement;
h) a statement that the requesting Party has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.”
Article 6 of the TIEA contains regulations regarding the Possibility of Declining a Request. Paragraph 2 of Article 6 reads as follows:
“The provisions of this Agreement shall not impose on a Contracting Party the obligation to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process. Notwithstanding the foregoing, information of the type referred to in Article 5, paragraph 4 shall not be treated as such a secret or trade process merely because it meets the criteria in that paragraph.”
Paragraph 3 of Article 6 reads as follows:
“The provisions of this Agreement shall not impose on a Contracting Party the obligation to obtain or provide information, which would reveal confidential communications between a client and an attorney, solicitor or other admitted legal representative where such communications are:
a) produced for the purposes of seeking or providing legal advice or
b) produced for the purposes of use in existing or contemplated legal proceedings.”
Paragraph 4 of Article 6 states the following:
“The requested Party may decline a request for information if the disclosure of the information would be contrary to public policy (ordre public).”
In addition Paragraph 5 of Article 6 of the TIEA contains a non-discrimination clause.
Article 10 of the TIEA contains regulations regarding a Mutual Agreement Procedure.
Click here to be forwarded to the text of the TIEA as available on the website of the Swiss Federal Department of Finance, which will open in a new window. (Or in French or in German)
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