Switzerland wants to wants top introduce stricter reporting requirements with regard to the law on the automatic exchange of financial information (AEOI) with other countries as it implements OECD's tax transparency recommendations.
Under the proposed changes, companies will have to retain certain documents that could be useful for AEOI purposes. Foreigners investing in Swiss property will also come under more scrutiny as the government wants to remove the reporting exception for apartment owners' associations. However, exception for the bank accounts of non-profits will be maintained as a result of strong opposition during the public consultation process.
However, non-profit associations and foundations will not be required to exchange of account information, at least for the moment, because the majority of respondents to the consultation objected to it.
"Since the handling of non-profit institutions under the AEOI is to be discussed again at international level, the Federal Council considers it premature to implement the Global Forum's recommendations", Switzerland has said.
The Swiss parliament is likely to examine the proposal for the first time in the 2020 spring session. It is not expected to come into force until the start of 2021 at the earliest.
The Swiss have been implementing the automatic exchange of information (AEOI) standard since 1 January 2017.Under that framework, details of Swiss bank accounts held by foreigners (or those with a fiscal residence abroad) are shared once a year with their countries of their origin or residence. Failure to do so would have meant being placed on the OECD's blacklist of non-transparent jurisdictions, and since then, jurisdictions have been subject to constant examination by the OECD.
The Swiss Federal Tax Authority recently revealed that it had provided details of around 3.1 million bank accounts held by foreigners (or those with a fiscal residence abroad) to their countries of their origin or residence in its second-ever data sharing exercise. In return, it got information on banking details of around 2.4 million accounts held by Swiss citizens/residents in 75 partner countries.
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