Federal Council initiates consultation on revision of Tax Administrative Assistance Act

02.09.2015 the Federal Council initiated the consultation proceedings on the revision of the Tax Administrative Assistance Act, which provides for an easing of Swiss practices with regard to stolen data. It should now be possible to respond to requests if a foreign country has obtained the stolen data via normal administrative assistance channels or from public sources. However, administrative assistance is still not possible if a country has actively acquired the stolen data outside of administrative assistance proceedings. The proposed legislative amendment will clarify the legal situation while also taking account of international developments.

The Federal Council had previously proposed easing administrative assistance practices in the case of stolen data in 2013 with the first revision of the Tax Administrative Assistance Act. However, the majority of the cantons, parties and business associations rejected the proposal in the consultation on that occasion. Since then, international practice has established that exceptions to the exchange of information will be tolerated only on a very restricted basis. For instance, the exchange of information could be refused if it is incompatible with public policy, such as in the case of requests motivated by racist, political or religious persecution.

Swiss practices were therefore increasingly called into question by numerous countries and the Global Forum. The Federal Council is thus clarifying the legal situation and taking account of international requirements with the proposed legislative amendment. In addition, Switzerland will find itself in a better position for phase 2 of the Global Forum peer review on administrative assistance in tax matters.

Therefore, although Switzerland will continue to reject administrative assistance requests based on stolen data actively acquired by the requesting state outside of administrative assistance proceedings, it intends to respond to requests in the future that are based on data that has been obtained by the requesting state through normal administrative assistance channels or from public sources and that has not been actively acquired in any other way. Nevertheless, the foreign taxpayers concerned will retain their legal right to lodge an appeal against the exchange of bank client data within the framework of administrative assistance.

The consultation will last until 2 December 2015. The bill is due to be discussed in Parliament in summer 2016.