Automatic exchange of information deal finalised

From next year Switzerland will fall into line with an international tax agreement Keystone

Switzerland has ratified an agreement on international co-operation on tax matters. It’s a deal that was given the go-ahead by the Swiss parliament at the end of last year.

The ‘Multilateral Convention on Mutual Administrative Assistance in Tax Matters’ means that Switzerland is coming into line with international standards on taxation. Over a hundred other states have already signed-up to the agreement.

The State Secretariat for International Financial Matters said today the ratification was “yet another step” for Switzerland in working together with other nations on taxation. 

The convention was jointly set up by the Organisation for Economic Cooperation and Development (OECD) and the Council of Europe.

It gives a legal framework for information exchange on request and spontaneously, and the much-discussed automatic exchange of information. The law will come into force in Switzerland on January 1, 2017.

The automatic exchange of information is part of the downfall of Switzerland’s famous secretive banking sector. Foreign clients stored money in private Swiss accounts without fear of having their assets disclosed to their home tax authorities.

All this changed when the United States Department of Justice took on the Swiss banks, and won. UBS was successfully prosecuted in 2009, and countless other banks then had to fall into line and release bank client data to the US.