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Swiss Federal Council rejects ‘Protection of Privacy’ Initiative

Swiss Federal Council rejects ‘Protection of Privacy’ Initiative

ZURICH: The Swiss Federal Council has recommended that Parliament reject the popular initiative “Yes to the protection of privacy” on the grounds that it interferes in tax and prosecution procedures and would endanger the accurate levying of federal, cantonal, and communal taxes.

The “Yes to the protection of privacy” initiative was launched in March 2013 by a cross-party committee headed by banker and Member of Parliament Thomas Matter. The popular initiative was filed with 117,596 signatures in September 2014. It calls for restrictions on the information third parties can provide to the authorities. It recommends that taxpayer information only be made available within the scope of criminal proceedings, and then only in cases in which a court confirms the suspicion of a serious tax offence.

Bank-client confidentiality is provided for in the Banking Act and Stock Exchange Act, which establish professional confidentiality comparable to that between doctors and their patients, lawyers and their clients, and priests for disclosures during confessions.

The Federal Council said that there are necessary limits to the protection of privacy in tax law. In order for income tax and wealth taxes to be correctly levied, taxpayers must disclose their income and assets to the tax authorities. However, as the Council pointed out, the information is confidential and may not be shared unless under a legally defined exception.

The Council said that, under the plans, if taxpayers violate their duty to cooperate, it would no longer be possible for the authorities to obtain information from employers or insurance companies. In addition, it argued the initiative would restrict the authorities’ capacity to seek information from banks in criminal proceedings concerning indirect taxes and in special serious offence investigations by the Federal Tax Administration.