Automatic Exchange of Information from a Swiss perspective

Chinese and Hong Kong-controlled Swiss companies, as well as many Hong Kong or mainland China residents – directly or indirectly through companies domiciled in offshore jurisdictions – hold accounts or deposits with Swiss banks. This article answers whether the relevant bank account data may become the subject of the Automatic Exchange of Information in Tax Matters (AEoI) pursued by the Organisation for Economic Co-operation and Development (OECD).

Background

In October 2014, 96 jurisdictions, including mainland China and Hong Kong, committed to implement the Standard for Automatic Exchange of Information in Tax Matters (AEoI Standard) as developed and released by the OECD Council on 15 July 2014. Of those 96, 56 plan to start exchanging bank account information from 2017, which means they will start collecting the respective data in 2016, and 40 – including mainland China, Hong Kong and Switzerland – committed to collect and share such information from 2018.

How it works

With countries other than the EU member states, Switzerland will exchange bank account information based on: (a) the Multilateral Competent Authority Agreement (MCAA), which is the legal framework for the implementation of the AEoI Standard; and (b) a bilateral treaty with each particular country with which information is to be exchanged. In other words, bank account information will only be exchanged between two OECD countries if they also signed and put into force a bilateral treaty adopting the AEoI Standard between them (the AEoI Bilateral Treaty Partners).