The Swiss Federal Council has recently requested authorisation from the National Council and the Council of States to amend certain double taxation agreements (DTAs), already approved by parliament, to ensure that they are in line with internationally applicable standards on administrative assistance in tax matters.
Commenting on the latest dispatch, the Swiss Federal Administration states that: “With the amendments, Switzerland stands by the concept of a level playing field for all countries. With the dispatch adopted today, the Federal Council is implementing the amendments to the requirements for administrative assistance requests decided on February 13, 2011.”
The administration notes that the DTAs with Denmark, Finland, France, the UK, Qatar, Luxembourg, Mexico, Norway and Austria, approved by parliament on June 18, 2010, are to be supplemented with an interpretation clause. This clause states that the requirements for an administrative assistance request should not hinder an effective exchange of information, the administration adds. It therefore also reduces the risk of failure in the peer review process of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the administration states.
The administration explains that: “The Federal Department of Finance (FDF) should be authorized by parliament to bilaterally agree the interpretation clause in an appropriate form with these nine states. Switzerland and the respective contracting state will thereby be bound by the requirements set out in the agreement for an administrative assistance request not to be interpreted in a formalistic and restrictive manner.”
It continues: “In accordance with the Federal Council decision of February 13, 2011, in future indicating the name and address of the taxpayer and the information holder is no longer absolutely necessary for processing administrative assistance requests, provided that the identification occurs by other means and fishing expeditions are not involved.”
“Because this rendering of the interpretation clause was not available at the time of approval by arliament on June 18, 2010, it must be approved by the National Council and the Council of States in order to be constitutionally secure and viewed as being approved by the legislator in possible appeals proceedings in court.”
“For each of these agreements, the Federal Council will thus submit a supplementary resolution to parliament on the interpretation clause and its definition. There will be a further supplementary resolution on the agreement with the United States, which was also approved by parliament on June 18, 2010. This agreement already contains the interpretation clause, which is why parliament only has to take a decision on its definition.”
The DTA amendments are to be implemented gradually, the administration concludes. With regard to agreements which are pending before parliament, the Federal Council has submitted a proposal for reconsideration. In the case of DTAs which have already been signed and which have not yet been submitted to parliament for approval and which do not contain an interpretation clause, the required amendments should be carried out with the partner state on a bilateral basis. This also applies to initialled DTAs.
Commenting on the latest dispatch, the Swiss Federal Administration states that: “With the amendments, Switzerland stands by the concept of a level playing field for all countries. With the dispatch adopted today, the Federal Council is implementing the amendments to the requirements for administrative assistance requests decided on February 13, 2011.”
The administration notes that the DTAs with Denmark, Finland, France, the UK, Qatar, Luxembourg, Mexico, Norway and Austria, approved by parliament on June 18, 2010, are to be supplemented with an interpretation clause. This clause states that the requirements for an administrative assistance request should not hinder an effective exchange of information, the administration adds. It therefore also reduces the risk of failure in the peer review process of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the administration states.
The administration explains that: “The Federal Department of Finance (FDF) should be authorized by parliament to bilaterally agree the interpretation clause in an appropriate form with these nine states. Switzerland and the respective contracting state will thereby be bound by the requirements set out in the agreement for an administrative assistance request not to be interpreted in a formalistic and restrictive manner.”
It continues: “In accordance with the Federal Council decision of February 13, 2011, in future indicating the name and address of the taxpayer and the information holder is no longer absolutely necessary for processing administrative assistance requests, provided that the identification occurs by other means and fishing expeditions are not involved.”
“Because this rendering of the interpretation clause was not available at the time of approval by arliament on June 18, 2010, it must be approved by the National Council and the Council of States in order to be constitutionally secure and viewed as being approved by the legislator in possible appeals proceedings in court.”
“For each of these agreements, the Federal Council will thus submit a supplementary resolution to parliament on the interpretation clause and its definition. There will be a further supplementary resolution on the agreement with the United States, which was also approved by parliament on June 18, 2010. This agreement already contains the interpretation clause, which is why parliament only has to take a decision on its definition.”
The DTA amendments are to be implemented gradually, the administration concludes. With regard to agreements which are pending before parliament, the Federal Council has submitted a proposal for reconsideration. In the case of DTAs which have already been signed and which have not yet been submitted to parliament for approval and which do not contain an interpretation clause, the required amendments should be carried out with the partner state on a bilateral basis. This also applies to initialled DTAs.
