Switzerland To Join Multilateral Convention On AEOI
The Swiss Federal Council has approved plans for the nation to join the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Financial Account Information, describing it as a logical step, after it agreed in principle in May to implement the new global standard on tax information exchange.
On November 19, the Council approved a declaration on Switzerland’s participation in the MCAA. The MCAA forms a basis for the future introduction of the cross-border automatic exchange of information, but does not affect Switzerland’s discretion to decide with whom it shares information. The bilateral “activation” of the AEOI with certain states will be submitted to the Federal Assembly separately for approval, the Council said.
The MCAA was signed by 51 states and territories on October 19, on the fringes of the plenary meeting of the Global Forum on Tax Transparency in Berlin. It sets out the conditions for the annual exchange of account information between the competent authorities of two countries in accordance with the Organisation for Economic Co-operation and Development (OECD) standard. Switzerland, in common with a number of other signatories, has stated that it intends to begin collecting data from 2017 and will exchange it for the first time in 2018.
The Council said that joining the MCAA is a logical step, after Switzerland declared on May 6 that, as a matter of principle, it would implement the global AEOI standard. Switzerland will use the Convention on Mutual Assistance in Tax Matters as the basis for its information sharing framework. The Convention was developed by the OECD and the Council of Europe, and Switzerland signed the agreement in 2013. The Council has likewise drawn up an implementing Act, which will lay the domestic legal foundation for the exchange of information with foreign countries.
The Federal Council will submit all of these proposals for consultation at the start of 2015. They must then go through the standard approval process: consultation with interested parties, the issuance of a Federal Council dispatch to Parliament, approval by Parliament, and an optional referendum.