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.