Switzerland and France clarified unresolved tax issues

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Switzerland and France have formally agreed on the interpretation of the renegotiated double taxation agreement (DTA). The two countries have also noted that the data stolen from HSBC in Geneva will not be used for requests for administrative assistance from France.

Due to this agreement, which is binding on both countries, the FDF no longer considers that there is any impediment to the revised double taxation agreement (DTA) being approved rapidly by parliament.

On 27 January 2010, Federal Councillor Hans-Rudolf Merz and the French Budget Minister Eric Woerth settled differences of opinion between the two countries concerning tax issues on the fringes of the World Economic Forum (WEF) in Davos. These concerned, on the one hand, the use of the bank data stolen in Geneva and, on the other, the interpretation of the new DTA signed between Switzerland and France on 27 August 2009. The two ministers confirmed this in a telephone conversation yesterday.

The exchange of letters between the Swiss and French tax authorities sets out the following points:

In cases where a country requesting an exchange of banking information knows the name of the bank holding the account of the taxpayer concerned, it shall communicate this information to the country to which the request is made. If, exceptionally, the requesting authority presumes that the taxpayer holds a bank account in the country to which the request is made, but does not, however, have information allowing it to identify without doubt the bank concerned, it shall supply all information in its possession to enable the bank to be identified. The country to which the request is made will respond to such a request provided that it is in line with the principle of proportionality and does not constitute a fishing expedition.

Use of stolen HSBC data

France reiterated to Switzerland that none of the data stolen from HSBC in Geneva would be used in requests for administrative assistance. In the case of requests from third countries, the French authorities will notify the Swiss authorities and transmit the requested information to the third countries. France has fulfilled a further condition by delivering a copy of the data stolen from HSBC in Geneva to the Swiss authorities.

Resumption of deliberations in parliament

The clarification of the unresolved tax issues will allow the ratification process to be resumed and help ease tensions in Franco-Swiss bilateral tax policy relations. The FDF has already suggested that the Council of States committee resume the approval process at its next meeting on 17 February. Switzerland thereby clearly indicates its readiness to implement this new policy.

Federal Department of Finance

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