11.11.2019 - The global standard on the automatic exchange of financial account information (AEOI) aims to increase tax transparency and thus prevent cross-border tax evasion. To date, more than 100 countries, including Switzerland, have committed themselves to adopting this standard. Domestic bank client confidentiality in Switzerland is not affected by the AEOI.
The legal foundations for the AEOI have been in force since 1 January 2017. To date, Parliament has approved the introduction of the AEOI with 89 partner states (as at 1 January 2019). Switzerland's network of AEOI partner states thus includes all EU and EFTA member states, almost all G20 and OECD states, Switzerland's most important economic partners and the world's leading financial centres. Financial account information was successfully exchanged with a total of 75 partner states at the end of September 2019. In summer 2019, the Federal Council submitted a dispatch to Parliament on expanding the Swiss AEOI network to include 19 additional partner states. These are the states and territories that are committed to the global AEOI standard and have announced a date for AEOI implementation. The two chambers will discuss the proposal by the end of 2019. If the proposed federal decrees are approved, it will be possible to introduce the AEOI with these new partner states from 2020 and exchange data for the first time in 2021. The selection of further partner states will depend on future developments at the international level (other states' commitments; Global Forum's Plan of Action for Developing Countries Participation in AEOI).
The Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) examines the domestic implementation of the AEOI standard by means of peer reviews. The aim is to create a level playing field worldwide. The peer reviews concerning the AEOI will start in 2020. To ensure the integrity of the AEOI standard from the outset, its key elements, including the national AEOI legal foundations, undergo a preliminary review in a phased process. In the context of this preliminary review, the Global Forum made recommendations to Switzerland. The proposal to amend the Federal Act and the Ordinance on the International Automatic Exchange of Information in Tax Matters aims to take the necessary measures to implement the Global Forum's recommendations. This concerns, among other things, certain due diligence and registration obligations, the inclusion of a document retention obligation for financial institutions, as well as definitions. Some exceptions are also to be removed or adapted. The amendments are to be brought into force by the Federal Council on 1 January 2021. The consultation procedure on the proposal was initiated on 27 February 2019 and ran until 12 June 2019.
The diagram depicts the flow of information between the authorities in country A and country B.
Taxpayer in country A has a bank account in country B. The bank in country B discloses certain financial account data to authorities in country B. Authorities in country B automatically forward information to the authorities in country A. Authorities in country A can examine foreign ﬁnancial account data. The following information is exchanged:
Identification information (information which the partner state requires to identify the accountholder): Name, address, date of birth, tax identification number
Account information (information to identify the accounts and the financial institutions subject to the reporting duty which the accounts to be reported hold): Account number, name and address of the financial institution
Financial information (information concerning account activity and balance): Interest income, dividends and other financial revenue, receipts from certain insurance policies, credit balances, proceeds from the sale of financial assets