Switzerland’s Federal Council proposes relaxation of bank secrecy

The Swiss Federal Council commissioned the Finance Department to draft a bill relaxing bank secrecy in the case of tax evasion.

Currently the cantonal tax authorities which are responsible for the assessment of federal and cantonal taxes on income and capital do not have access to bank data. The access can be granted only by a court order in case sufficient evidence were presented that a particular taxpayer committed tax fraud, or by order of the Finance Department’s head in the case of severe tax evasion. But such order is not granted in case of simple tax evasion. The proposal to relax bank secrecy is based on the recent amendments regarding bank secrecy in international tax matters.

In 2009 Switzerland accepted the OECD standard for administrative assistance in the case of tax evasion and withdrew the reservation on paragraph 5, article 26 of the OECD Model Convention. This led to the situation where bank secrecy is less strict in international tax matters than in domestic cantonal tax matters.