If foreign authorities request information about Swiss bank accounts in suspicious cases, this will be granted as part of the administrative assistance. The administrative assistance is approved if the information is considered “likely to be relevant”. This regulation is regulated in the double taxation agreement and has been common practice up to now.
Request for assistance from the French tax authorities in 2013
In one case of a French couple, the French tax authorities applied for administrative assistance from the Federal Tax Administration (FTA) in 2013. She asked the FTA to provide information about the couple with Swiss tax domicile. The French tax authorities suspected that the couple had their actual place of residence in France, which is why they submitted the application for administrative assistance. The FTA has agreed to the delivery of the information and wanted to transmit data on the account balances and information on transactions, stating the third parties involved.
Complaint to the Federal Administrative Court in 2014
The French couple then lodged a complaint with the Federal Administrative Court. The complaint was approved in 2014 and the administrative assistance decision was thus overturned. The decision of the Federal Administrative Court was justified by the fact that the presumption of the French tax authorities could not be adequately substantiated and the information to be delivered was therefore not assessed as “likely to be significant”. In its decision, the Federal Administrative Court also states that Swiss law does not allow documents with the names of third parties to be transmitted as part of administrative assistance.
Federal Supreme Court contradicts the Federal Administrative Court
In its decision of September 24, 2015, the Federal Supreme Court came to a different conclusion than the Federal Administrative Court and approved the administrative assistance decision. The Federal Supreme Court held that when assessing whether information is to be regarded as “likely to be significant”, no “excessive requirements” may be made.
With this decision, the Federal Supreme Court has reversed the previous practice of delivering bank data to foreign tax authorities. Based on the decision of the Federal Supreme Court, it can be assumed in future that Switzerland will generally provide administrative assistance, unless there are good reasons against it. Until now, due to banking secrecy, it was only possible to deliver customer data if the information was “likely to be significant”. In its decision, the Federal Supreme Court now states that banking secrecy does not prevent administrative assistance. This also applies to bank account information, stating the third parties involved.
We are happy to answer any questions you may have!