Milano, October 2nd, 2009
Disclosure Rules & IssuesDisclosure Rules & Issues
Disclosure Rules & IssuesMilano, October 2nd, 2009
Chris Leenders, Koenen en Co, Maastricht, the Netherlands
Kerstin Heidrich, Revitrust, Zürich, Switzerland
Content1. Introduction2. Art. 26 OECD3. Domestic law in
a. Belgium d. Netherlandsb. Austria e. Italyc. Luxemburg
Content
4. Recent developments5. Swiss national/international regulations6. What to do? Grandfathering rules?
Introduction
• Credit crunch• Governments need money• Pressure on Tax Havens
Questions
1. Is the Swiss banking secrecy over?2. Does any future exchange of info include
pre renegotiated info?3. When is a request “specified” enough?
Article 26 OECD• Foreseeable relevant• Wide extent; no fishing expedition• Non residents are includedHowever• Not obtainable• Secret info
Commentary on art. 26 §3, nr. 14“not go beyond its own internal law and
administrative practice”
however
tax secrecy ≠obstacle for exchange
Reservations made to art. 26:• Austria• Switzerland• Luxemburg• Belgium
Domestic law in• The Netherlands• Belgium• Luxemburg• Italy• Austria
Recent developments• Austria: Treuhand Union• US: UBS 4450• Italy: NZZ online
Famiglia Agnelli• Netherlands: protocols to treaties
with: Switzerland, Belgiumtreaties on information exchange:
Bermuda, Guernsey, Cayman Islands, Caribbean
Tax Haven Switzerland ?Swiss tax system• Focus on direct taxes• Taxation of income &
wealth, profit & capital, consumption as well as certain other transactions• Healthy tax competition
between the cantons
Tax evasion vs. tax fraudTax evasion results from an intentional or negligent omission by tax liable person i.e., not the entire income/ all assets are included in the tax declaration.
Tax fraud implies the use in bad faith of counterfeit, falsified or false documents such as accounts, annual statements, salary sheets, vouchers, etc.
Banking secrecy – legal basisSwiss Civil Law• Duty of the banker to keep secrecy on the personal
circumstances of his or her client (contractual duty);• General provisions as regards the protection of personal
rights (Civil Law Art. 17 ff.).
Swiss Banking Law• Criminal liability of the banker in case of breach of his or her
professional discretion (Banking Law Art. 47).
Banking secrecy – abrogationNon-protection of felony and delinquency
– money launderers– fraudsters– terrorists– corrupts– dictators/potentates– tax exiles (?)
Aim of Double Taxation TreatiesSwitzerland:A DTT rules the right to tax certain income between the contracting states i.e., its sole aim is to avoid double taxation.
OECD & US:Besides its traditional aim to avoid double taxation a DTT also serves the prevention of tax escape.
Legal vs. administrative assistance Legal AssistanceExchange of informa-tion between judicial authorities in cases where criminal proce-dures have been instituted.
Admin. AssistanceExchange of informa-tion between tax authorities for (i) a correct application of the treaty and (ii) for all other tax purposes.
Requests for legal assistance Every year 1’600 – 2’000 requests for legal assistance are filed with Switzerland. Only a very small number relate to tax delinquencies.
Requests for legal assistance with fiscal background
Switzerland now on the “white list”• 12 DTT’s including the OECD standard disclosure rules
had to be signed to discharge Switzerland from the “grey list”.
• The contracting states are: Denmark, Luxembourg, France, Norway, Austria, UK, Mexico, Finland, USA and Qatar (10). In addition, the amendment of the DTT with Denmark by the territory of the Faroe Islands (1) and the automatic applicability of the OECD disclosure rules to the DTT with Spain (1) count as one more DTT each.
Stages until entry into force1. Initialing = finalization and agreement on the wording2. Signing = following the federal council’s authorization3. Enactment by the Parliament4. Facultative referendum = voluntary popular vote (based
on a respective request by 50’000 people/signatures)
An already enacted treaty can only be defeated, if the majority of the people vote “NO”.
“Fishing expeditions”… no chance!• Required Information
- name of the tax suspect- name of the bank
(exception France, but nodifference in practice)
- period of time- description of
information- tax purpose
Grandfathering• Majority of the protocols - new rules effective for tax
years beginning on or after 1 January of the next year following the entry into force of the relevant protocol
• US - new rules effective as of the date of signing of the relevant protocol (23 September 2009)
• France - new rules effective for tax years beginning on or after 1 January of the next year following the date of signing of the relevant protocol (1 January 2010)
• No retroactive information will be made available
Questions?
Thanks!