Swiss Govt Plans More Financial Transparency

Global Forum’s Recommendation

                Global Forum on Transparency and Exchange of Information for Tax Purposes has issued certain recommendations on financial transparency matters. The Swiss Federal Council, comprising of seven people, approved those and agreed to increase reporting requirements when it comes to law of automatic exchange of financial data with other countries. Automatic Exchange of Information known shortly as AEOI is a global project that aims to fight with tax evasion. Switzerland is closely cooperating with AEOI as it tries not to get blacklisted for not having transparent enough financial rules. For years Switzerland has been known as a country great for storing huge sums of money on accounts. Many wealthy individuals choose Swiss banks to store their value in CHF/EUR or USD. Also, foreign investors eagerly buy Swiss francs as a store of value, as it is known as a safe haven asset. But now Switzerland wants to be more financial transparent and is co-operating with initiatives like AEOI. The Global Forum assessed Swiss situation and issued some new recommendation to implement, which were approved by Federal government.

New Rules

                New recommendations obliged companies to provide certain documents that can be of use for AEOI. Additionally, foreigners that invested in Swiss apartments and other real estate will be more closely investigated, as the Federal Council wants to scrap the reporting exception for associations of properties’ owners. What won’t change is the expectation for non-profits organizations’ bank accounts, as adding them to the network of financial data exchange was met with opposition from public in consultation process of new rules.

Network of Information

                Switzerland has been providing information on financial data of institutions and individuals since January 2017, but it does not happen on regular basis. The details of bank accounts of foreigners held in Switzerland are shared once per year with countries of their residence of origin. The largest exchange of data in both directions was conducted with Germany in 2018. When it comes to number of countries, the biggest exchange took place this year, as Switzerland exchanged data with 63 partner countries under AEOI treaty. Information of around 3.1 million bank accounts of foreigners were given to countries of their origin or residence, and in return Switzerland received information on 2.4 million accounts of Swiss residents held abroad. Switzerland received data from as much as 75 countries, but gave back only to 63, as 12 of them did not meet confidentiality and security requirements or choose to turn down Swiss data. In 2020 the AEOI network will be expanded to 90 countries.