Those Secret Swiss Bank Accounts Are Not So Secret Anymore

October 5, 2018, 11:15 AM UTC

Switzerland: you may know it for its cheese or skiing—or, more recently, its cryptocurrency-philia—but you almost certainly know it for its extreme secrecy regarding the funds that people store there.

Well, that’s over now. On Friday, Switzerland’s tax authorities announced that they exchanged financial information with counterparts in other countries for the first time, at the end of September.

“Identification, account and financial information is exchanged, including name, address, state of residence and tax identification number, as well as information concerning the reporting financial institution, account balance and capital income,” the Swiss Federal Tax Administration (FTA) said Friday. “The exchanged information allows the [local] tax authorities to verify whether taxpayers have correctly declared their financial accounts abroad in their tax returns.”

This is all thanks to an international standard for the automatic exchange of financial account information (AEOI), which came into effect at the start of 2017 under the auspices of the Organisation for Economic Co-operation and Development (OECD).

Switzerland signed up this anti-tax-evasion measure, and since the start of last year its financial institutions have been compiling account information relating to customers who live in 38 states and territories—this is the data that is now being shared. Swiss financial institutions have since the start of this year been collecting data on account-holders from a further 38 partner states, and this information will be shared for the first time around a year from now.

The first exchange of data took place between Switzerland and EU countries, Canada, Guernsey, Iceland, Isle of Man, Japan, Jersey, Norway and South Korea.

Australia is also supposed to be in that first tranche, but the FTA said Friday that transmission to that country was delayed as the Australian authorities hadn’t yet shared data with it for “technical reasons”—the same goes for France, and the Swiss tax authority noted that Croatia, Estonia and Poland had also failed to share data thus far.

“Cyprus and Romania are currently excluded as they do not yet meet the international requirements on confidentiality and data security,” the FTA also noted.