Switzerland and Australia have signed a joint declaration committing them to the automatic exchange of information (AEOI) in tax matters on on a reciprocal basis. Once the legal niceties have been completed, both countries will start collecting data in 2017 for transmission the following year. The Swiss Federal Council, or government, said today the joint declaration meets the criteria it set in October 2014 for negotiating such agreements: aside from the EU and US, the negotiations initially concern individual other countries with which there are close economic ties and which provide their taxpayers with sufficient scope for regularisation.
"From a legal viewpoint, the two countries will exchange information automatically based on the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA)," the Federal Council statement said. The MCAA is based on the international standard for the exchange of information, known as the Common Reporting Standard (CRS), developed by the OECD. Almost 100 states endorsed the MCAA during the Global Forum meeting in Berlin last October, committing them to adopting the CRS and to starting exchanging information on this basis for the first time in 2017 or 2018.
Achim Pross, head of the International Cooperation and Tax Administration division of the OECD, welcomed the agreement.
“It shows countries are serious about commitments and are using the MCAA as the way to implement the exchange part," he told International Tax Review. "It is very positive the CRS is being translated into more agreements and countries can be congratulated on that. It’s not just a European game, but a global one. This shows it is one standard across the world, from Switzerland to Australia.”
The Swiss statement emphasised some of the key concerns it has had about exchanging information, such as confidentiality, and other benefits of the declaration.
"The joint declaration specifies that each jurisdiction is satisfied with the confidentiality rules provided for in the other jurisdiction with regard to tax," the Swiss statement added. "Moreover, Australia has established a regularisation procedure for its taxpayers. Finally, Australia has also declared its willingness to hold talks on improving market access for Swiss financial service providers."
The Swiss Federal Department of Finance (FDF) will now prepare a consultation draft on the introduction of AEOI with Australia and the corresponding federal decree will be submitted to Parliament for approval
