Tax Treaty Case Law around the Globe 2014

S. 383Chapter 39 Switzerland: Revised Wording of Article 26 on Mutual Administrative Assistance in Tax Matters

Salome Zimmermann and Cédric Ballenegger

39.1. Introduction

Based on the initial provisions of its double taxation agreements (DTAs), Switzerland traditionally only granted administrative assistance in tax matters limited to information necessary for carrying out the provisions of the applicable agreement in relation to taxes being the subject of the agreement. Furthermore, information could not be transmitted if protected by a professional secret such as banking secrecy. This policy was documented in a reservation to article 26 of the OECD Model (2005) with the following wording:

24. Switzerland reserves its position on paragraphs 1 and 5. It will propose to limit the scope of this Article to information necessary for carrying out the provisions of the Convention. This reservation shall not apply in cases involving acts of fraud subject to imprisonment to the laws of both Contracting States.

Due to political pressure exercised by the OECD, which threatened to put Switzerland on a grey list or even a blacklist, and even more by the United States (keyword UBS), the Federal Government...