Self-reporting without penalty for natural persons

What is a voluntary disclosure?

A voluntary disclosure allows taxpayers in Switzerland to subsequently declare undeclared income or assets and avoid criminal consequences. However, this is only possible once and requires compliance with certain conditions.  

Requirements for a non-punitive voluntary disclosure

1. Unawareness by the authorities: The tax authorities must not be aware of the tax evasion. Once an investigation is underway or the authorities are otherwise informed, a voluntary disclosure is no longer possible.

2. Complete disclosure and cooperation: The taxpayer must fully disclose all undeclared income and assets and cooperate unconditionally with the tax administration.

3. Payment of back taxes and late fees: The taxes evaded from the last ten years must be repaid, including late fees. A monetary penalty is waived for the first voluntary disclosure.

Process of voluntary disclosure

1. Submission: The voluntary disclosure is made in writing to the competent tax authority. There are no specific formal requirements, but it should be clearly identifiable as a voluntary disclosure. All relevant documents must be attached, e.g., bank statements, securities, and evidence of undeclared income.

2. Review and calculation: After submission, the tax authority reviews the information and calculates the back taxes. This includes a recalculation of the last ten tax years to determine the difference between the taxes actually paid and the correct taxes.

3. Additional payment: The taxpayer must pay the calculated back taxes and late fees within the set deadline. With this payment, the process is completed and there will be no entry in the criminal record.

Special notes

- Automatic Exchange of Information (AEOI): Since the introduction of the AEOI, the options for voluntary disclosure have been restricted. For accounts in AEOI countries, whose data has already been exchanged, a non-punitive voluntary disclosure is no longer possible.

- Heirs and supplementary taxation: There is a simplified supplementary taxation for heirs that only includes the last three tax years of the deceased. The prerequisite is immediate disclosure and fulfillment of the cooperation obligation.

Conclusion

A voluntary disclosure provides the opportunity to correct tax errors and avoid legal consequences. However, it is crucial to act quickly and cooperate comprehensively to benefit from the advantages of non-punitive voluntary disclosure.