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Switzerland Commits To Automatic Tax Information Exchange

Friday, October 10, 2014

On October 8, 2014, the Swiss Federal Council adopted definitive mandates for negotiations with other countries to introduce the new global standard for the automatic exchange of tax information in tax treaties.

Negotiations will be launched with the European Union (EU) on the automatic exchange of information. A Model One Foreign Account Tax Compliance Act (FATCA) agreement will also be negotiated with the US for the implementation of FATCA. The agreements will allow data to be exchanged automatically between the competent authorities on a reciprocal basis.

Negotiations on the automatic exchange of information will be initiated with further selected countries. Consideration will be given to countries with which Switzerland has close economic and political ties and those that provide their taxpayers with sufficient scope to regularize their affairs.

New laws are being prepared by the Federal Department of Finance (FDF) and will be submitted to Parliament alongside the negotiated agreements.

The Federal Council said that Switzerland welcomes the new standard, having contributed actively to its creation. According to the Council, the standard allows for a level playing field between financial centers. The Council stressed that domestic bank client confidentiality will not be breached following the standard's implementation.

Switzerland has been clear that the exchanged information should be used solely for the agreed purpose (the principle of speciality), the exchange should be reciprocal, data protection should be ensured, and the beneficial owners of trusts and other financial constructs should be identified. The Council has also stated that issues surrounding the regularization of past tax dues and market access must be addressed. It said solutions will be sought in negotiations with the EU and EU member states.

The Council has also agreed to a letter being sent by the FDF to the Global Forum on Transparency and Exchange of Information for Tax Purposes, which reaffirms Switzerland's intention to introduce automatic information exchange in a timely manner.

Swiss financial institutions could begin collecting the account data of foreign taxpayers in 2017. The first exchange of information could take place in 2018, subject to parliamentary approval of the necessary laws.

A group of over 40 states, being called "early adopters," have announced that they will start collecting information in 2016 and intend to exchange it for the first time in 2017.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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