Swiss government tables proposal for more financial transparency

The Federal Council wants to increase the reporting requirements with regard to the law on the automatic exchange of financial information with other countries.

On Wednesday, the seven-member governing body approved the implementation of certain recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes. Since January 2017, Switzerland has been providing information on financial information concerning individuals and institutions to other countries on a reciprocal basis. For example, the details of Swiss bank accounts held by foreigners (or those with a fiscal residence abroad) are shared once a year with their countries of their origin or residence.

Known as the Automatic Exchange of Information (AEOI) the global initiative aims to help prevent tax evasion and Switzerland is cooperating to avoid being blacklisted for failing to provide enough transparency. The Global Forum has assessed the extent of Swiss cooperation and submitted a list of recommendations. After a public consultation, the Swiss government wants to enshrine these recommendations into law.

New aspects include obliging companies to retain certain documents that could be useful for AEOI purposes. Foreigners investing in Swiss property will also come under more scrutiny as the government wants to remove the reporting exception for apartment owners’ associations. However, exception for the bank accounts of non-profits will be maintained as a result of strong opposition during the public consultation process.