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Swiss government proposes to loosen bank secrecy for Swiss tax matters


Robert Desax, Baker & McKenzie Zurich


What does the Swiss government’s proposal cover?



The proposal covers two elements: (1) unifying procedural aspects for all types of Swiss taxes, and (2) eliminating the difference between tax evasion and tax fraud for disclosure of bank data. The second element is expected to lead to political controversies within Switzerland.

Currently, bank secrecy in domestic situations is only removed if a tax fraud has been committed, i.e. if taxpayers use counterfeited documents. In contrast, in cases of mere tax evasion (i.e. if items of taxable income or wealth were not declared) the tax authorities cannot demand that banks divulge to them information on bank accounts held by Swiss taxpayers.

Under the new proposal, Swiss tax authorities would have access to bank data of taxpayers in cases of mere tax evasion too. This development is a direct consequence of Switzerland’s 2009 abolition of bank secrecy in international tax matters. One substantial difference would remain in the domestic context: there must still be a suspicion that a tax evasion has been committed by a Swiss taxpayer. In contrast, in an international context, for an information to be provided, it is already sufficient that the bank data requested is “foreseeably relevant” for the application of the foreign tax legislation.



The implications of the proposed changes are quite complex. The international evolution around Swiss banking secrecy in the past few years usually concerned foreign (i.e. non-Swiss) tax residents. Switzerland would grant foreign governments access to Swiss bank accounts of the foreign tax residents in order to enable the foreign governments to enforce their own (foreign) tax laws. In the wake of the philosophical change in international tax matters, some politicians in Switzerland repeatedly voiced their concern that the Swiss tax authorities were being discriminated against. They requested an “equality of treatment” and wanted to be given the same powers as foreign governments, i.e. that they be able to access banking data of Swiss taxpayers, too.

The immediate reactions by politicians and the media have shown that there is no unanimity at all in the matter. One could indeed question the need for such amendments and whether there is really inequality of treatment between foreign and Swiss tax authorities. Requests for information of foreign governments usually concern foreign taxpayers who own bankable assets with Swiss banks. These foreign taxpayers are usually non-residents who are not subject to Swiss taxation. In such cases Switzerland delivers information which is foreseeably relevant under foreign tax legislation. In contrast, the cases foreseen by the proposal where Swiss authorities request access to bank information, would involve Swiss taxpayers. These cases are not comparable with requests for international exchange of tax information. While one can argue that the right to financial privacy of foreign taxpayers should not be a matter of Swiss law (and has effectively ceased to be in 2009), the issue of tax residents is much more unclear. One could also emphasize the fact that the current legal distinction made between tax fraud and tax evasion and its limitative effect on the possibilities of Swiss tax authorities to access private financial data of Swiss taxpayers, has generally worked quite well.

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