The Swiss Federal Supreme Court on 11 September 2016 decided that a “group request” filed by the Netherlands for unnamed customers of a Swiss bank was acceptable, and reverse a decision of the Swiss Federal Administrative Court.
After the closure of a voluntary disclosure program in the Netherlands, the Dutch tax authorities tried to obtain the names of persons who either did not satisfy their tax obligations or did not participate in the voluntary disclosure program.
The Dutch tax authorities submitted a request to the Swiss tax administration for administrative assistance concerning certain un-named customers of Swiss banks. The “group request” was for bank customers domiciled in the Netherlands and who had held accounts with the bank between 1 February 2013 and 31 December 2014 and who were notified by the bank that their accounts would be closed unless they could prove their tax conformity and the customers in fact did not prove such tax conformity to the bank.
The Swiss tax administration determined that this group request was permissible. However, the Swiss Federal Administrative Court subsequently determined that the group request was not permissible.
Following deliberations on 11 September 2016, the Swiss Federal Supreme Court decided that the group request was acceptable.
Switzerland has already concluded more than 60 income tax treaties and tax information agreements that permit administrative assistance based on group requests. Moreover, under the OECD administrative assistance convention concerning Switzerland, group requests will be possible as of 2017. The administrative assistance convention foresees retroactive effect to 1 January 2014. It is expected that a number of other countries could follow the example set by the Netherlands and address Switzerland with similar group requests. At this time, it remains to be seen which countries will place a similar request.
Bank customers still holding undeclared assets need to consider disclosing these assets as soon as possible, especially in view of the fact that many countries are offering rather attractive voluntary disclosure programs at the moment. Also, Switzerland will begin to transmit tax data regarding 2017 for the first time in September 2018 to EU Member States, Australia, Guernsey, Isle of Man, Iceland, Japan, Jersey, Canada, Norway, and South Korea.
Read a September 2016 blog posting by the KPMG member firm in Switzerland: Swiss Federal Supreme Court considers Dutch Group Request as permissible
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