The Swiss Federal Council has begun consulting interested parties about the international exchange of tax-related information with the publication of two documents.

Two bills are involved. One concerns the Organisation for Economic Co-operation and Development/Council of Europe administrative assistance convention signed by Switzerland in October 2013. The other bill concerns Switzerland's participation in the Multilateral Competent Authority Agreement and the Automatic Exchange of Information [AEOI] Implementing Act. Parliament will be asked to pick out the countries with which Switzerland should exchange information automatically at a later, separate stage.

The OECD convention

The 'administrative assistance' convention makes provision for the three forms of information exchange: upon request, spontaneous and automatic. The Federal Council says that it wants to 'exclude' assistance in enforcement and administrative assistance for the service of documents. It is also proposing to make two declarations: firstly, that Switzerland will generally inform affected persons about the forthcoming exchange of information; and secondly, that Switzerland will not allow foreign authorities' requests to conduct tax audits in Switzerland.

The MCAA and the AEOI Act

Switzerland signed the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA) on 19 November 2014. The MCAA is based on the idea of uniform implementation of the OECD's AEOI standard. Not all of the provisions of the MCAA and the common reporting standard are sufficiently detailed, justiciable and thus directly applicable, and that is why the enactment of an accompanying federal law is necessary.

The Federal Act on the International Automatic Exchange of Information in Tax Matters (AEOI Act) governs the implementation of the AEOI standard and contains provisions on the organisation, the procedure, judicial channels and the applicable criminal provisions. The AEOI Act essentially refers to the Data Protection Act for the affected persons' right to inspect and their procedural rights.

The bilateral activation of the AEOI will be addressed in separate bills that will be submitted to the Federal Assembly for approval. Corresponding negotiations with the European Commission and possible partner states are under way or will commence in the near future. The exchange of information within a country is not affected by the global standard and it is not covered by the two consultative processes either.

Both consultative exercises will run until 21 April 2015. The Federal Council's dispatches for the attention of Parliament are expected in the summer. Parliament can therefore discuss the draft legislation from autumn 2015 onwards. This means that the necessary laws could come into force from the beginning of 2017, perhaps after a referendum. The first automatic exchange of information would then take place in 2018.