Impact of the AIA on the penalty-free voluntary disclosure

Under certain conditions, a penalty-free voluntary disclosure is possible in Switzerland. The most important requirement is that the cantonal tax authority has no knowledge of the tax factors reported. This raises the question of what impact the Automatic Exchange of Information (AIE) has on the penalty-free voluntary disclosure. The Swiss Federal Tax Administration (SFTA) has now taken a position on this question.

For Refreshment

‍In Switzerland, there is the possibility of a penalty-free voluntary disclosure. Individuals who own assets unknown to the fiscal authorities can report this themselves. If certain conditions are met, they then face no penalty. They only need to pay the tax amount and the back tax. The Automatic Exchange of Information arose from the global effort to combat tax evasion. In cross-border situations, banks have to collect certain data on their own and forward it to the tax authorities. The respective authorities then autonomously exchange the information among themselves. For more information, see our series of posts on penalty-free voluntary disclosure and Automatic Exchange of Information.

‍What impact does the AIE have on penalty-free voluntary disclosure?

‍The competence to decide whether the legal requirements for penalty-free voluntary disclosure are met or not will continue to lie with the cantonal tax administrations. For tax factors subject to the AIE, it is assumed from 30 September 2018 that the tax authorities were aware of them. Thus, penalty-free voluntary disclosure is no longer possible. Tax factors that arose only after 2017 or from countries that joined the AIE later are similarly governed by 30 September of the year in which the data were first exchanged. If the tax administration obtains knowledge of such tax factors through means other than the AIE, the date does not matter. In addition, all legal provisions for penalty-free voluntary disclosure must always be met.

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