Swiss government to move on the road of fiscal transparency

The Swiss government plans to dramatically increase international cooperation on fiscal transparency, sharing private information about clients of the country's banks.
The automatic exchange of information (AEOI) on bank accounts will be spread to 22 more countries, including Argentina, Mexico, Brazil, and Uruguay as well as India and South Africa, according to the Federal Department of Finance.

The move aims to put an end to Switzerland's long-protected banking secrecy practices as well as stopping wealthy foreigners from hiding their undeclared income in the country.

The government said consultations on the move would be held through mid-March, and that it expected the accords to enter into force by Jan 1, 2018 and for information exchange to begin a year later.

The government says, “This will contribute to strengthening the competitiveness, the credibility, and integrity of Switzerland's financial center.”
Faced with international pressure, Switzerland has been working hard to phase out its banking secrecy laws, which long made the country's banks a magnet for wealthy foreigners wishing to hide their assets from the taxman back home.

The Alpine nation already has automatic information exchange agreements with 38 other countries, including with all the EU states, Gibraltar and Australia, where such exchanges are set to become the norm next year.

The AEOI system is a global standard introduced by the Organization for Economic Cooperation and Development (OECD) to fight tax evasion. As part of the regulations, all banks are obliged to send client information to national tax authorities with data on foreign residents to be shared with tax authorities in the customers' home countries.

Under the system, all banks must at the end of each year transmit to their national tax authorities client information, including on account holdings, dividend interest earnings and revenues from the sale of shares and certain types of insurance contracts.

For foreign residents, the information is then passed on to the tax authorities in the clients' home countries.