International Tax Cooperation and Information Exchange in Switzerland
Switzerland has significantly increased its international tax cooperation since 2009, moving from a model of strict bank secrecy to one of broad transparency. Today, Switzerland participates in all major information exchange frameworks: the Automatic Exchange of Information (AEOI/CRS), FATCA with the United States, and administrative assistance upon request. This transformation has profound implications for individuals and companies with cross-border tax situations. PBM Avocats advises clients in Geneva and Lausanne on all aspects of international tax information exchange.
Main Information Exchange Frameworks
| Framework | Mechanism | Partner Countries | Scope |
|---|---|---|---|
| AEOI / CRS | Automatic exchange — annual | 100+ countries | Bank accounts, securities, insurance |
| FATCA | Automatic / upon request — USA | United States only | US persons' accounts in Swiss banks |
| Administrative assistance (upon request) | Upon specific request — after DTT | DTT partner countries | Specific tax information requested |
| Spontaneous exchange | Proactive transmission | Partner countries | Tax rulings, specific information |
The Automatic Exchange of Information (AEOI/CRS)
The AEOI is the most important development in international tax transparency. Based on the OECD's Common Reporting Standard (CRS), it requires Swiss financial institutions to automatically transmit annually to the FTA the financial account data of non-resident clients, who then forward this data to the tax authorities of the clients' country of residence.
Information transmitted includes:
- Account balances at year-end
- Interest, dividends and other income received
- Total gross proceeds from sale of financial assets
- Identity of the account holder (name, address, TIN, date of birth)
Administrative Assistance Upon Request
When a foreign tax authority suspects that one of its residents has undeclared income in Switzerland, it may send an administrative assistance request to the FTA. The procedure:
- The requesting authority must demonstrate the foreseeable relevance of the requested information
- Fishing expeditions (requests without specific suspicion) are prohibited
- The Swiss taxpayer is notified and has the right to be heard
- They may appeal before the Federal Administrative Court
- The FTA then decides whether to transmit the information
PBM Avocats represents individuals and companies in administrative assistance proceedings, challenging requests that do not meet the legal conditions or protecting data that should remain confidential under applicable treaties.
FATCA — US Persons in Switzerland
The Foreign Account Tax Compliance Act (FATCA) requires Swiss financial institutions to identify and report accounts held by US persons. Switzerland has concluded an intergovernmental agreement (IGA) with the US for this purpose. US persons who have Swiss accounts must comply with their US reporting obligations (FBAR, Form 8938) and may benefit from specific regularisation programmes.