OECD tax transparency assessors rate Switzerland as 'overall largely compliant'
Thursday, 28 July, 2016
Switzerland has been rated as 'overall largely compliant' by the OECD's Global Tax Transparency Forum, following the completion of the Phase 2 peer review process started last year.
A Phase 2 peer review checks that a jurisdiction is actually following the tax transparency practices set out in its legislative framework and in international agreements for exchange of information on request.
The OECD Forum had previously criticised Switzerland’s practices on two main grounds. One was that the Swiss authorities insisted on notifying affected taxpayers in every case where a foreign government requested disclosure of their bank account details. The second was its long-standing reluctance to act on foreign administrative assistance requests that were founded on stolen data. This was especially sensitive, as Switzerland is one of the commonest targets of international administrative assistance requests, receiving about 10,000 a year.
In the past year, Switzerland has agreed to water down its position on these two points – and the OECD's 'largely compliant' overall rating is the result.
'The positive rating has been achieved as a result of the measures taken by Switzerland in several areas during the assessment period from 1 July 2012 to 30 June 2015', said a Federal Finance Department spokesperson. 'The Global Forum assessed as positive in particular the exception to the taxpayer notification procedure enshrined in the Tax Administrative Assistance Act for administrative assistance requests, and the extension of Switzerland's network of standard-compliant information exchange agreements'.
'What we achieved for Switzerland is absolutely central', Finance Minister Ueli Maurer told a press conference.
However, some of Switzerland's continuing practices, such as the toleration of bearer shares in some circumstances, were criticised in the OECD report. So was its regime concerning the availability of beneficial ownership and identity information.
Moreover, a new peer review round on the exchange of information on request will begin this year, with Switzerland's review due to start at the end of 2018. The assessment terms of this new round will include new elements – in particular group requests, the identification of beneficial owners and the quality of administrative assistance requests submitted by countries.
'If Switzerland is to maintain its good rating or even improve on it in the next review round, it must examine how the Global Forum's recommendations can be implemented', said the Federal Finance Department.
- St Lucia has obtained a 'largely compliant' rating from the OECD Global Tax Transparency Forum. So did Pakistan, Albania, Cameroon, Gabon and Senegal, but the United Arab Emirates was rated only partially compliant.
- Swiss Federal Finance Department
- OECD (Full peer review report, PDF file)
- STEP news story (13 June 2016): Swiss cantons accept compromise on stolen bank account data
- STEP news story (14 May 2015): OECD approval uncertain over tax transparency request procedures
- STEP news story (10 March 2014): Swiss bank account holders lose right to be warned of foreign requests
- OECD (St Lucia report, PDF file)