The legendary Swiss banking secrecy is swiftly being left in the past, with the European Union and Switzerland signing a transparency agreement that will see them automatically share detailed information on their respective citizens, and the bank accounts that they hold.
Currently the data can only be accessed upon request, but from 2017 both parties will be obliged to collect information including names, addresses, tax identification numbers and dates of birth, financial and account balance information.
The automatic exchange will then be effective from 2018 on an annual basis (subject to the treaty passing a vote in the Swiss Parliament, and being put to an optional referendum).
The EU Commission believes the new transparency will not only help both parties crack down on tax evasion, but also act as a deterrent for EU citizens contemplating hiding income and assets abroad.
TMF Group Switzerland Managing Director and EMEA Head of Private Clients, Matthias Belz, said: "Switzerland's agreement to the automatic exchange of financial information doesn't come as a surprise. Switzerland has been committed to the "white money" strategy for years now and the entire financial sector has been, and continues, to change accordingly.
"Whilst it will be painful for some financial players, it will be good for the entire industry in the medium to long run. TMF Group Switzerland welcomes the change and increased transparency, and believes it will strengthen Switzerland's standing in the financial world."
The Organisation for Economic Cooperation and Development (OECD) wants to establish the data-swapping model as a global standard, and nearly 100 countries have now agreed to put it in place.
An initial agreement between the EU and Switzerland was reached in March 2015, with Switzerland this year also signing a data sharing deal with Australia. Similar agreements are currently being negotiated between the EU and Andorra, Liechtenstein, Monaco and San Marino.
Read more about doing business in Switzerland.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
