CANBERRA: Australia and Switzerland have agreed to begin automatic exchange of tax information on each other’s citizens, as the Alpine country seeks to distance itself from its reputation as a haven for undeclared offshore assets.
The two countries will supply each other with tax information based on international standards, the Swiss State Secretariat for International Financial Matters, known as SIF, said Tuesday. The standards, set by the Organization for Economic Cooperation and Development in 2014, require governments to collect and share information on bank accounts and financial instruments held by foreign citizens.
Around 100 countries, including Switzerland and all 34 OECD nations, have said they would adopt the new global standard for automatic exchange of tax information, according to the SIF. The standard is designed to help eliminate tax evasion and improve international tax cooperation. The agreement comes amid continued pressure on Switzerland over banking secrecy, an issue that was highlighted last month by allegations that the Swiss private-banking unit of HSBC Holdings PLC had aided clients in avoiding taxes. The Geneva public prosecutor’s office has searched the offices of HSBC Private Bank (Suisse) SA as part of a probe of those allegations.
Authorities around the world are cracking down on tax evasion, an effort that has picked up steam since the financial crisis. Swiss and Australian tax authorities will begin collecting data in 2017 and expect to share the information the following year, the SIF said. The agreement with Australia marked Switzerland’s first under the OECD guidelines on reciprocal exchange of tax data. The Swiss government is currently negotiating with the U.S. on a similar element as part of the Foreign Account Tax Compliance Act, while discussions with the European Union are at an “advanced stage,” according to a SIF spokeswoman.