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Switzerland Unifies Criminal Tax Law

Wednesday, 05 June 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas

The Swiss Federal Council has recently submitted for consultation a bill which aims to unify the Confederation's criminal tax law, thereby "eliminating" current weaknesses in the system and increasing legal certainty.

Highlighting the fact that the criminal tax law plays "a determining role in efforts to guarantee tax payment," the Federal Department of Finance (FDF) explains that at the moment, regulations, investigative procedures, and competencies vary significantly depending on the type of tax concerned. As a result, legal uncertainty arises and procedures are obstructed, the FDF points out.

To resolve the issue, the Federal Council plans to standardize procedures, to prevent excessive penalties being imposed, and to ensure that the same investigative instruments are applied within the framework of these procedures. This will restore legal certainty in the criminal tax law, guaranteeing that an individual is treated in the same way, irrespective of the procedure followed, the FDF maintains.

Under existing legislation, requests for banking information may be sought during criminal tax procedures for indirect taxes, although not for direct taxes. The Federal Council's bill will enable the cantonal tax authorities to access such information in future for cases involving direct tax. Access to data is to remain limited to criminal tax procedures, however, and requires prior approval from the head of the cantonal tax administration. For tax procedures, banking secrecy is to be maintained.

Given that the distinction made in Switzerland between tax evasion and tax fraud has for a long time been criticized, the Federal Council intends to unify the elements constituting an infraction. Consequently, tax fraud is to be redefined as a qualified form of tax evasion. This will ensure that a double fine is not incurred for one or other infraction. To comply with the latest Financial Action Task Force (FATF) recommendations, the bill provides that a serious tax offence is a crime, deemed to be a predicate for money laundering. A serious tax offence involves sums in excess of CHF600,000 (USD628,209).

The consultation ends on September 30, 2013.



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