Anti-fraud agreement

Status as at December 2018

Brief summary

In cases of fraud and serious evasion offences in the field of indirect taxes, Switzerland offers the EU and its member states not only mutual assistance but also administrative assistance. Although not all EU members have ratified the relevant agreement, it has been applied by Switzerland, the EU and a number of member states since January 2009, i.e. ahead of schedule.

Administrative and mutual assistance for offences related to indirect taxes

The anti-fraud agreement is the last agreement of the second series of bilateral negotiations, and it has not yet entered into force. As a mixed agreement, it must be approved and ratified not only by the European Union, but also by each member state. The aim of the agreement is to improve cooperation between Switzerland and the EU and its member states in the combat against fraud and other unlawful acts in the area of indirect taxes (e.g. VAT, mineral oil tax, tobacco duty), subsidies and public procurement. The agreement covers both administrative assistance and mutual assistance provisions. The application of coercive measures in cooperation with the EU is no longer limited to tax and duty fraud, but now also includes cases of tax and duty evasion. The agreement does not apply to direct taxes.

For the purpose of combating fraud, Switzerland provides EU authorities with the same instruments that are used in Swiss proceedings, i.e. also coercive measures, within the framework of administrative assistance. Coercive measures include, for example, house searches, questioning of witnesses and access to bank accounts. However, they will be taken only if dual criminality applies, i.e. if the cases are equally punishable in both legal systems. Moreover, the amount of the offence must exceed EUR 25,000 and a judicial search warrant must be available.

With respect to assets that originate from tax and duty fraud or professional smuggling and are invested or laundered in Switzerland, mutual assistance is granted. The Swiss definition of money laundering is not affected by this, however.

Not applicable in the field of direct taxes

The principle of speciality applies. This means that information transmitted abroad within the framework of mutual assistance or administrative assistance may not be used for proceedings regarding direct taxes (e.g. taxes on income and capital), as these are not covered by the agreement.

Early application

Switzerland ratified the agreement on 23 October 2008 and has been applying it ahead of schedule since January 2009. So far, 27 EU member states and the European Commission have ratified the agreement. Ireland has not yet ratified it. Some EU member states believe the ratification process is taking too long. Therefore, they too are applying the agreement ahead of schedule, in accordance with Article 44 paragraph 3.