Friday, November 9, 2018
The Swiss Federal Council has amended its automatic exchange of tax information (AEOI) legislation to remove a transitional provision relating to the initial stage of implementation.
The Council has removed the transitional provision concerning the term "participating state" in the Ordinance on the International Automatic Exchange of Information in Tax Matters. The changes will come into effect from January 1, 2019.
According to the definition of the standard on the AEOI, a participating state is a state with which an AEOI agreement exists. Because the AEOI would not be introduced by all states at the same time, countries were allowed by the OECD to introduce a transitional provision in their national law according to which participating states have undertaken to implement the AEOI.
The aim of a transitional provision was to reduce the burden on reporting financial institutions during the introductory phase of the AEOI. Switzerland included a transitional provision in the Ordinance.
More than 100 states and territories have since introduced the AEOI and expanded their agreement networks. The OECD has therefore called on participating states to remove their transitional provisions.
The Swiss Federal Council said that removing the transitional provision from the Ordinance ensures that Switzerland is correctly implementing the global AEOI standard. It added that the change should have only a minor impact on Swiss financial institutions.