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2017/03/29 07:00:00 GMT+2

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New multilateral tax convention in force

New multilateral tax convention in force

Switzerland has a highly developed legal framework for the exchange of tax information. This article provides an overview of the agreements currently in force.

Switzerland pursues a strategy of tax transparency. On 1 January 2017, Switzerland adopted the Multilateral Convention on Mutual Administrative Assistance in Tax Matters of the OECD and the European Council. The so-called Multilateral Convention paves the way for the exchange of information between the 84 participating countries, and is only one of the measures that Switzerland has undertaken to improve standards in tax transparency.

Exchange on request

On 13 March 2009, the Swiss Federal Council decided to adopt the standards for the exchange of information on request as defined in Article 26 of the OECD Model. Since then, a significant number of the roughly 100 Swiss tax treaties have been aligned with this standard. In addition, ten tax information exchange agreements (TIEAs) between Switzerland and offshore jurisdictions have been concluded. Mutual administrative assistance in tax matters under these treaties and agreements was subject to a peer review performed by the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum). In July 2016, the Global Forum completed this peer review and Switzerland was given a good overall rating of “largely compliant”.

Automatic Exchange of Information

On 19 November 2014, the Swiss government signed the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Information (AEOI). At that time, Switzerland was among the first group of countries to commit to adopting the new AEOI standards as defined by the OECD. The financial services industry in Switzerland began to apply the new standard on 1 January 2017. The first exchange of data will take place in September 2018 with 38 partner states, including all member countries of the European Union. The Swiss government is currently preparing the legal framework for the addition of 41 new partner states.

International standards have a tradition in Switzerland

It is a fact that Switzerland has always actively participated in the establishment of international standards for the financial services industry and related areas. In 1930, the Bank for International Settlements was established in Basel. Banks worldwide follow the capital requirements set out in the Basel Accords agreed upon by the members of the Basel Committee on Banking Supervision. Switzerland also has a tradition of being proactively involved with the Financial Action Task Force (FATF) and the International Monetary Fund (IMF) .

It is a fact that Switzerland has always actively participated in the establishment of international standards for the financial services industry and related areas.

Switzerland may have lagged behind with respect to implementing Article 26 of the OECD Model. Since 2009, however, the country has made every effort to adjust to the standard on the exchange of information and is closely following international developments. Today, Switzerland has a highly developed legal framework for the exchange of tax information.

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