Swiss Federal Council today adopted an ordinance pertaining to automatic exchange of tax information as well as proposed revisions to administrative assistance requirements, as it moves closer to implementing the new regime that would benefit India and other countries.
Against the backdrop of global crackdown on illicit fund flows, Switzerland -- famed for its banking secrecy practices -- has been working towards putting in place measures to ensure increased transparency in tax matters.
During its meeting today, the Council adopted the ordinance on International Automatic Exchange of Information in Tax Matters which would be effective from January 1, 2017.
"The ordinance contains the Federal Council's implementing provisions for the Federal Act on the International Automatic Exchange of Information in Tax Matters (AEOI Act)," the Swiss Finance Ministry said, adding that the proposal met with widespread approval in the consultation.
The ordinance also mentions other non-reporting financial institutions as well as exempt accounts, and regulates details with respect to due diligence requirements for reporting Swiss financial institutions.
"Aside from the implementing provisions for the AEOI Act, the ordinance sets out other provisions which are required to implement the automatic exchange of information. The ordinance also includes implementing provisions on the tasks of the Federal Tax Administration (FTA)...," the Ministry said in a release.
The AEOI have to be activated bilaterally in order to be introduced with a partner state.
So far, Switzerland has signed an agreement on the introduction of the AEOI with the EU apart from joint declarations on the basis of Multilateral Competent Authority Agreement (MCAA) with a number of other countries, including India.
On Tuesday, India and Switzerland signed the joint declaration for implementation of AEOI under which both countries will start collecting data in accordance with the global standards in 2018 and exchange it from 2019 onwards.
Meanwhile, the Federal Council today also adopted the total revision of the Tax Administrative Assistance Ordinance (TAAO) and that would also be in force from January 1, 2017.
The new ordinance defines the framework and the procedures required for the spontaneous exchange of information including those that apply for the exchange of information on advance tax rulings, the Ministry said in a separate release.
Besides, the Federal Council has adopted the dispatch on the multilateral agreement on the exchange of country-by- country reports and the federal act required for its implementation.
"The objective of the proposal is to improve transparency with regard to the taxation of multinationals and to establish a uniform framework for the exchange of the reports," the Swiss Finance Ministry said in another release.
Disclaimer: No Business Standard Journalist was involved in creation of this content
