Tuesday, July 23

Swiss tax authority exchanged financial information with partner countries

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Swiss tax authority follows automatic data exchange standards

The Swiss tax authority exchanged financial information with partner countries. The service has sent data on 3.3 million accounts of foreign citizens in 70 countries, and in response received information from 96 countries about their residents and their 2.1 million accounts.
This procedure is carried out in the framework of the world standard of automatic exchange of data. It should be noted that 26 partner countries have sent the necessary information to Switzerland, but the state has not sent them data about their citizens. The tax authority explained this by the fact that 14 of these countries do not comply with international standards on confidentiality and data protection. The other 12 states refused to provide account information.
At this point, the local IRS lists more than 8.5 thousand financial institutions, which include banks and insurance companies. They all pass on information about people who place funds in the country. In turn, the tax authorities exchange such financial information with partner states.

Swiss tax authority follows automatic data exchange standards

Switzerland clearly adheres to internationally accepted standards for the automatic exchange of tax data. These requirements were introduced in 2017 on the basis of legislation to which the partner countries adhere. It requires the provision of information, which includes the name of the account holder, country of residence, physical and legal address, and a personal identification number. In addition, information about the institution itself, the amount of funds in the account, as well as income and capital are specified. With this information the tax authority can check the reliability of the information that enters the documents of the Swiss who live abroad, and citizens of other countries who operate in Switzerland.
The state regularly expands the list of countries with which it exchanges tax data. In 2021 it was expanded to 96 names.
The tax system in Switzerland operates in view of the federal structure of the country, which includes 26 cantons and 2650 municipalities. Each canton has its own taxation, the only exceptions are those rates that are imposed by the federal government. For example, corporate income tax is federal, it has a flat rate of 8.5% of income after other taxes have been paid. In addition, cantons may have special regimes which are in addition to federal taxes. They apply only on condition that the law on harmonization of tariffs on both levels is fulfilled. As far as the capital tax is concerned, it is levied by the cantonal authorities once a year.


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