The Swiss government proposes substantial amendments to Swiss tax legislation impacting bank secrecy in Swiss tax matters. It is expected to cause considerable political turmoil. This development is a direct consequence of Switzerland's implementation of the OECD standard on exchange of information in tax matters. The draft law, once it is published, will have to pass parliamentary approval and possibly prevail in a public vote.

What does the Swiss government's proposal cover?

The proposal covers two elements: (1) unifying procedural aspects for all types of Swiss taxes, and (2) eliminating the difference between tax evasion and tax fraud for disclosure of bank data.

Currently, one violation can impact a number of taxes and can therefore be subject to different procedures and involve various authorities (the assessments of which can differ). The poposal aims at unifying the applicable procedures and intends to clarify potentially concurring jurisdictions.

The second element is politically much more explosive. Currently, bank secrecy in domestic situations is only removed if a tax fraud has been committed, i.e. if taxpayers use false documents (such as false financial statements, salary certificates or bank statements etc.) in order to deceive the authorities. In contrast, in cases of mere tax evasion (e.g. if items of taxable income or wealth were not declared) the tax authorities cannot demand information from banks on bank accounts held by Swiss taxpayers. In such cases, the tax authorities therefore usually issue discretionary tax assessments which can have a strong dissuasive effect on non-compliant taxpayers.

Under the new proposal, Swiss tax authorities would also have access to bank data of taxpayers in cases of mere tax evasion. This development is a direct consequence of Switzerland's 2009 acceptance of the OECD standard of information exchange and the abolition of bank secrecy in international tax matters. Since then, representatives of tax authorities and cantonal finance ministers have repeatedly requested to be granted the same access to bank data of Swiss taxpayers as foreign governments would be granted in international information requests. The government's proposal apparently endorses that concern. One substantial difference would remain in the domestic context: corresponding proceedings must still be initiated against that taxpayer. In contrast, in an international context, for information to be provided it is already sufficient that the bank data requested is "foreseeably relevant" for the application of the foreign tax legislation.


The proposed unification of procedural provisions in the different tax laws addresses the recurring problem that the consequences of one tax infringement are often difficult to oversee, especially since various authorities may be in charge who may reach different conclusions. As such, that part of the proposal would assist in increasing legal certainty under Swiss tax laws and has a good chance of being accepted.

The implications of the second part of the proposal are more complex. The international evolution around banking secrecy in the past few years usually concerned foreign (i.e. non-Swiss) tax residents. In theory, requests for information exchange could also concern Swiss tax residents but there are probably rather few such cases. Typically, it would concern foreign individuals who had bank accounts in Switzerland without being Swiss tax residents. The question was then whether Switzerland would grant foreign governments access to Swiss bank accounts of the foreign tax residents in order to enable the foreign governments to enforce their own (foreign) tax laws. In the wake of the philosophical change in international tax matters, some politicians in Switzerland repeatedly voiced their concern that in an environment of information exchange the Swiss tax authorities were discriminated against. They requested an "equality of treatment" and wanted to be given the same powers as foreign governments, i.e. that they be able to access banking data of Swiss taxpayers.

The immediate reactions to the recent proposal by politicians and the media have shown that there is no unanimity at all in the matter. One could indeed question the need for such amendments and whether there is really inequality of treatment between foreign and Swiss tax authorities. Requests for information of foreign governments usually concern foreign taxpayers who own bankable assets with Swiss banks. These foreign taxpayers are usually non-residents and are not subject to Swiss taxation. In such cases, Switzerland delivers information which is foreseeably relevant under foreign tax legislation. In contrast, the cases foreseen by the proposal where Swiss authorities request access to bank information would involve Swiss taxpayers who are liable to Swiss taxes. Thus, these cases are not comparable with requests for international exchange of tax information. It is difficult to see why in a purely domestic context, Swiss tax authorities should be granted an equality of treatment based on the OECD standard of international exchange of information. While one can argue that, the righ to financial privacy of foreign taxpayers should not be a matter of Swiss law (and effectively ceased to be in 2009), the issue of tax residents is less clear. One could also argue that the current legal distinction operated between tax fraud and tax evasion and its limitative effect on the possibilities of Swiss tax authorities accessing private financial data of Swiss taxpayers has generally worked quite well.