Finance minister advocates domestic tax amnesty
Switzerland’s participation in agreements over the automatic exchange of information means that tax amnesty within the country's borders should be considered for a fair playing field, says the country’s finance minister.
Eveline Widmer-Schlumpf told the Neue Zürcher Zeitung (NZZ) newspaper that “if the rules are changed, a fair transition is needed”.
Under agreements stipulating the automatic exchange of information (AIA), which Switzerland signed on to in 2013 and 2014, information about non-declared bank accounts of Swiss citizens living abroad would also be made available to cantonal tax authorities starting in 2018.
Widmer-Schlumpf says that “in the framework of the AIA, we agreed with foreign partner countries on a continuing regularisation of the past which included tax penalties and fines”. Now, she argues that “considerations need to be made in this direction” for tax authorities within Switzerland as well. This would mean that Swiss tax evaders could declare their untaxed assets voluntarily and face a less harsh penalty.
The Swiss finance minister said such tax amnesty possibilities had already been discussed internally within the government but that it’s not yet clear what such an arrangement could look like.
“Tax amnesty would especially become a top issue if banking secrecy were also lifted within Switzerland,” Widmer-Schlumpf told the NZZ.
However, bills that cabinet presented on Friday regarding the automatic exchange of information did not contain any references to domestic tax amnesty. Those bills called on parliament to amend legislation over tax issues with other countries and addressed due diligence rules for financial institutions, including banks and casinos.
The automatic exchange of information agreements with the Organisation of Economic Development and Co-operation (OECD) and the Council of Europe were signed by Switzerland in October 2013 and November 2014 respectively.
They cover different forms of exchange of tax data, including legal assistance in fiscal matters.
Switzerland has had a law in place since 2010 which offers the possibility to declare undeclared assets once in one’s lifetime without having to pay penalties. Individuals who take advantage of that option must still pay all back taxes and interest.
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