Switzerland: The end of banking secrecy for foreigners
11 July 2014
Posted by: Author: Thomas Kaufman
Author: Thomas Kaufman (BDO)
On 6 May 2014 the Declaration on Automatic Exchange of Information in Tax Matters was endorsed during the OECD’s annual Ministerial Council Meeting in Paris by all 34 member countries, along with Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia,Singapore and South Africa.
The Declaration commits countries to implement a new single global standard on automatic exchange of information. The standard, which was developed at the OECD and endorsed by G20 finance ministers on 2 May 2014, obliges countries and jurisdictions to obtain all financial information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis.
In addition to Switzerland, Singapore and Luxembourg, two other major financial centres, will participate in the exchange of information system. The adoption represents a political statement of intent. The formal introduction of global standards is yet to be established and the adoption of the new rules has to pass Swiss governmental procedures for the change of laws.
The actual exchange of information between countries is likely to start in 2017 at the earliest.
This article first appeared on bdo.co.za.