Tax Criminal Law: Will the appeal now be resumed?
Switzerland faces a possible revision of tax criminal law, influenced by international standards and political developments.
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The adoption of Art. 26 of the OECD Model Agreement, or the standard recorded therein, necessitates a revision of Swiss tax criminal law. This should be directly linked with other adjustments. However, since autumn 2015, this project has been put on hold. Due to new developments, the project might now possibly be resumed.
The Change
Unlike almost any other country in the world, Switzerland makes a very strong distinction between tax fraud and tax evasion. In particular, tax evasion has long been seen in Switzerland as a "minor offense" and was not as severely punished as it is in most other countries. With the endeavor to establish international standards in the areas of tax and financial policy and the relevant laws, this distinction, however, has become increasingly irrelevant. For example, the adoption of the standard recorded in Art. 26 of the OECD Model Agreement demands that Switzerland must also provide legal assistance in cases of tax evasion. However, this would require an adjustment of the tax criminal law. This adjustment should have additionally led to the lifting of double punishment as well as to uniform procedural regulations and expanded investigative tools in tax criminal proceedings.
The Standstill
The necessary adjustment has been in planning for a long time. Starting with the decision of the Federal Council in May 2009 to adopt the new principles of international cooperation in finance-related crimes. In November 2015, however, the Federal Council decided to postpone the revision. The reason for this was the lack of a political majority. There was mostly critical feedback already in the consultation stage. Moreover, there was a reaction to the proposal for the "Yes to Privacy Protection" initiative. The Federal Council still said in August 2017 that it would make the resumption of the suspended revision dependent on the conduct of the public referendum. Now, however, the initiative was withdrawn on January 9, 2018. It will be interesting to see if the revision of the tax criminal law will now be resumed.
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