Switzerland Eyes EU AIE Framework Deal
by Ulrika Lomas, Lowtax.net, Brussels
26 November, 2013
Swiss Finance Minister Eveline Widmer-Schlumpf has revealed that Switzerland is actively seeking to negotiate a framework treaty with the European Union (EU), to enable the Confederation to automatically exchange fiscal information with the tax authorities of European Union member states.
During a keynote address at a conference in Geneva organized by Academy and Finance and L'Agefi, Finance Minister Widmer-Schlumpf explained that a framework agreement would enable negotiations with the EU to begin. Switzerland must press ahead in the direction of automatic information exchange (AIE), the Swiss Finance Minister insisted, warning of the consequences for the Swiss financial center and economy of ongoing uncertainty surrounding regulations.
Switzerland currently has two options, Widmer-Schlumpf stressed. It may decide not to wait until a new global exchange of information standard enters into force, and elect to bilaterally resolve the past, namely the issue of undeclared foreign assets held in the Confederation, with the individual countries concerned. Alternatively, it may opt instead to automatically exchange information with all EU member states, Widmer-Schlumpf said, emphasizing that this would be an attractive option, given that around half of all Swiss banking clients are EU residents. Widmer-Schlumpf has made known her support for an automatic information exchange mechanism for quite some time.
Given the outcome of the latest Global Forum on Transparency and Exchange of Information for Tax Purposes in Jakarta, Widmer-Schlumpf's commitment to an automatic exchange of information could not have come at a better time.
Lamenting the fact that Switzerland has still not met the international standards on tax transparency, the OECD warned that this lack of tax compliance is potentially putting investments at risk, damaging the financial center's reputation, and making it unattractive to do business in the Confederation. The OECD deemed that Switzerland does not have the required legislation in place to facilitate tax cooperation.
Commenting, Pascal Saint-Amans, responsible for tax policy at the OECD, maintained that large international companies and financial institutions would therefore think twice about investing in the Confederation.
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