Switzerland Unveils Strategy To Combat Tax Fraud
Monday, March 1, 2010
The Swiss Federal Council has unveiled details of measures for implementing
its financial market strategy, including initial measures designed to combat
tax fraud and tax evasion.
In December 2009, the Federal Council took the decision that it did not wish
to attract undeclared funds from overseas to Switzerland. In order to achieve
this goal, the Federal Council has announced its decision to continue to consistently
and swiftly implement the Organization for Economic Cooperation and Development (OECD) standard in the area of taxes and to continue
to cooperate with other countries in combating tax fraud and tax evasion in
future. The Federal Council is also eager to regularize undeclared assets, while
nevertheless rejecting the automatic exchange of information.
Given that Switzerland has a strong financial centre important for its economy,
the Federal Council is determined to preserve its integrity, and is therefore
gearing its financial market strategy to that of managing declared assets. Indeed,
on December 16, 2009, the Federal Council adopted a corresponding strategy,
outlined in its report entitled "Strategic directions for Switzerland's
financial market policy".
In order to implement this strategy, the Federal Council has instructed the
Federal Department of Finance (FDF) to continue to consistently and swiftly
implement the new administrative assistance policy. Since March 13, 2009, Switzerland
has been offering international administrative assistance in accordance with
the OECD standard, and no longer makes a distinction in relation to foreign
countries between tax fraud and tax evasion in the case of corresponding applications.
In the meantime, Switzerland has negotiated double taxation agreements (DTAs)
with 18 countries on the basis of the OECD standard. The onus is now on parliament
to ratify these agreements, and the Council of States is due to address the
first five DTAs shortly.
According to the Federal Administration: “With the objective of achieving
clarity and legal security, the Federal Council therefore wants to push ahead
with the regularization of undeclared assets whilst at the same time ensuring
that privacy is safeguarded. The Federal Council is against attracting undeclared
funds from overseas. In order to prevent new, undeclared funds from coming to
Switzerland, the FDF will draw up various solutions.”
The Federal Council is also eager to examine in greater detail the opportunities
for improved market access in the case of individual states and the European Union (EU), although
the possibility of concluding a comprehensive service agreement with the EU
on improving market access was dismissed by the Federal Council. According to
the analysis of a working group, the legal and institutional differences between
Switzerland and the EU (in the area of infrastructure) would lead to complex
and protracted negotiations.