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SWITZERLAND
– Overview
www.taxdirectorshandbook.co.uk
298
Switzerland implements
OECD standards
S
witzerland has an open
and transparent tax regime
characterised by a moderate tax
burden. At the international
level, administrative assistance prevents
fraud, and a system of withholding tax
is aimed at preventing tax avoidance.
Switzerland has always considered that
a certain degree of competition in tax
matters may have overall positive effects.
At the same time, it is recognised that
excessive tax competition may have
harmful consequences. Like any other
country, Switzerland is not immune
to these effects and has therefore
always been determined to inhibit tax
competition to the extent that it is
harmful.
Recent developments in a summary
Switzerland had come under repeated
attack during the last couple of years for
assisting foreign nationals in evading
taxes in their home country. The political
pressure from OECD member states
on Switzerland to adopt the OECD
exchange of information standards was
immense. Thus, Switzerland started
renegotiating its double taxation
agreements (DTA). Although it was
discussed whether or not a regime of
an automatic exchange of information
as applied by most member states shall
be introduced, Switzerland refused to
automatically transfer information to
foreign tax authorities without proof of
a tax evasion or fraud. Therefore, the
renegotiated DTAs do not provide for
an automatic exchange of information.
Administrative assistance will only be
provided upon a formal request of a
contracting state and only if there is a
justified suspicion that a tax evasion or
fraud has actually occurred. Based on
the extended administrative assistance
clause, and in accordance with Article
26 of the OECD Model Tax Convention
(OECD Model), Switzerland may no
longer distinguish between tax fraud
and tax evasion. By the end of August
2011, Switzerland initialled or signed
35 DTAs that implement international
standards on exchange of information.
Ten of these DTAs have already entered
into force. On 1 October 2010 a new
ordinance regarding administrative
Presented by Natalie Peter and Severine Vogel,
partner and associate at Staiger, Schwald & Partner