To comply with global norms, Switzerland on Wednesday began consultation process for unilaterally amending bilateral tax treaties to allow exchange of information when there is a request from another country.
Amid rising international pressure, including from India, Switzerland has been taking steps to share tax information as well as dispel perception that the country is a safe haven to stash away unaccounted wealth.
The Swiss Federal Council has started the consultation procedure, which would go on till February 5 next year, to bring in the provision of exchange of information on request in bilateral tax treaties.
The proposed law would allow “Switzerland to swiftly amend its double taxation agreements which do not yet comply with the international standard for exchange of information upon request”, the Swiss government said.
This step is part of efforts to make Switzerland a “competitive and tax-compliant financial centre in line with the international standard”.
However, the unilateral application of the new provision would be subject to principles of reciprocity and confidentiality of the exchanged information. Besides, the proposed mechanism would be a transitional measure.
Last week, Switzerland had agreed to share with India information on Indians having illicit money in Swiss banks on providing independent evidence in each case to the Alpine nation.
Switzerland has already revised majority of its double taxation agreements (DTAs) network and has inked seven tax information exchange agreements.
“Although 38 of these revised DTAs are in force, a certain number are not yet in compliance with the OECD standard to which the new law would apply.
“If it were to enter into force today, 69 states or territories would be affected. This number should be lower, however, by the time the law enters into force,” Swiss government said in a statement.
With regard to the tax treaty amendment, Swiss Federal Council has started the consultation procedure on the Federal Act on the Unilateral Application of the OECD Standard on the Exchange of Information (GASI).
Paris-based Organisation for Economic Cooperation and Development (OECD) sets global tax standards.