Swiss get ‘largely compliant’ tax status rating

Finance Minister Ueli Maurer was delighted by the review: "What we achieved for Switzerland is absolutely central" Keystone

Switzerland is said to be “largely compliant” in an international peer review of how well it shares tax information with other countries, which was released on Tuesday.

The Swiss finance ministryExternal link said the ‘positive rating’ reflects progress made during the assessment period from 1 July 2012 to 30 June 2015 with the implementation of the international standard for the exchange of information on request.

The evaluation External linkwas carried out by the Global Forum on Transparency and Exchange of Information for Tax Purposes, which is overseen by Organisation for Economic Cooperation and Development’s (OECD) member states. It is the second phase of the review and focuses on the implementation and effectiveness of the system to exchange tax information.

The ranking puts Switzerland, whose financial centre is the world’s biggest for managing offshore wealth, on the same level as rivals including Singapore, Liechtenstein and Hong Kong, the finance ministry said.

The evaluation said that “Switzerland’s approach to exchange of information for tax purposes has changed significantly over the past three years.” Switzerland has made several changes to the law to break down its historical banking secrecy barriers and allow countries access to information that could help them track down tax cheats.

The number of requests for administrative assistance tripled in the last year to around 10,000.

Concerns 

However, some concerns remain, including identifying the owners of bearer shares which can be issued by some types of Swiss companies, the use of stolen bank data by other countries to request information on suspected tax cheats, and also with regard to foreign entities carrying on business or with a permanent establishment in Switzerland.

Switzerland was ranked ‘partially compliant’ for its refusal to accept tax data requests from countries based on stolen bank data. The review urged it to modify appropriate Swiss legislation and practices. The Swiss government has signalled its intent to cooperate on some probes involving stolen data, but this has yet to be passed by parliament.

The peer review welcomed Switzerland’s attempt to ease administrative assistance in tax matters and extend its network of double-taxation agreements.

“What we achieved for Switzerland is absolutely central,” Finance Minister Ueli Maurer told reporters in Bern on Tuesday, saying international recognition was crucial to ensure financial stability and to conduct business as usual.

With bank account secrecy for tax avoidance now largely abolished, Switzerland in future will have to rely on its reputation for political and economic stability to win business, he added.

A new round of peer reviews on how countries exchange information begins this year. Switzerland’s review will start in 2018.