Double taxation

SWISS TAXPAYERS

For individuals resident in Switzerland, Swiss bank confidentiality is not effected by the implementation of the new global standards of the automatic information exchange (AIA). However, tax fraud and serious tax evasion make it possible to repeal bank confidentiality.
All Swiss taxpayers with accounts, real estate, investments or pensions abroad, which have not been declared in Switzerland, should consult a tax expert. In most cases a voluntary declaration (self-denunciation) is advisable, as early as in 2017 to avoid high fines additionally to regular tax payments.

Attention:
In suspicious cases, it is possible for the tax authorities can to make inquiries, which can result in a voluntary declaration with impunity.
We are familiar with the double taxation agreements as well as the addition of administrative assistance and the essential aspects of the automatic information exchange treaties.
We will gladly assist you in resolving your uncertainties or tax issues regarding undeclared income and/or financial assets.

AUTOMATIC INFORMATION EXCHANGE (AIA)

The financial institutions (and insurances) transfer information to the national tax authorities, who automatically forward the information to the authorities in the investor’s country of origin.

The Following information is transferred:

  • Name and address
  • The investor‘s date and place of birth
  • Tax identification number (TIN: participant identification number)
  • Interest and dividends
  • Income from specific insurance contracts
  • Account balances and revenue from selling financial assets

The Swiss Tax Administration (EStV) is responsible for the execution of the automatic information exchange (AIA). All the states with major centres for finance have introduced the automatic information exchange.

DOUBLE TAXATION AGREEMENTS (DBA)

Do you have income and/or financial assets in more than one country? If there is an existing double taxation agreement your income will not be taxed in both countries. The taxation in more than one country is prevented by double taxation agreements (DBA). These agreements, however, only regulate the income and not the possible tax deductions.
The Swiss legislation requires you to declare your universal income and assets in Switzerland. Switzerland has contracted more than 100 double taxation agreements with other countries. .
In addition, there are tax information treaties with 51 OECD standard countries as well as 9 territories (as of 07.05.2018) – either by amending the double taxation agreement with administrative assistance, the additional protocols to the double taxation agreement with administrative assistance or the most-favoured-nation clause (Spain). 
For people resident in Switzerland, the administrative assistance entails that income and assets from a foreign country with a double taxation agreement which are not declared in Switzerland can be checked. The assets can include pension income, securities, accounts, life insurances as well as properties and real estate.
If foreign income or assets are not declared in Switzerland and this is discovered, the tax authorities will initiate criminal proceedings for tax evasion or tax fraud.

FACTA II

As of 2013 most of the European countries, including Switzerland, will often unilaterally transmit financial data to the USA in course of Facta II (= Foreign Account Tax Compliance Act). All banks in contact with other financial institutions and those practicing business relations with the USA are obliged to transmit the data of the US citizens and greencard holders.
The double taxation agreement with the USA has not been enforced as of 31.08.2017 and it is doubtful whether this agreement will be put into effect under the new government. The USA profit from their own tax havens, especially as the Europeans and South Americans have a lack of tax evasion possibilities in Switzerland, Luxembourg, Austria and Belgium.