In the last edition of “Analysis” published in April, we discussed the automatic exchange of information between Switzerland and other countries, together with aspects which, at first glance, appear to be aimed at non-residents with assets in Swiss financial institutions. Yet exchanges of information, whether at the request of authorities or (in the near future) automatic, are just as important for Swiss citizens who own assets abroad. Moreover, the international expansion of this practice has given rise to an obligation for Switzerland to write the attendant rules into its own legislation. The notion of tax fraud has been extended, an amendment which will come into force on 1 January 2016.
Unlike in “typical” money-laundering offences that are already punishable, the amended law will provide that money arising from tax fraud may not only derive from criminal activity, such as drug trafficking, corruption or organised crime, but also from a legal activity such as work, brokerage services or investment income. Until now tax offences, apart from a few rare cases of contraband or VAT evasion, were not considered crimes in Swiss law. The amended act will thus broaden the range of felonies initially grouped with money laundering to include tax fraud proper—namely, evading tax on an amount exceeding CHF 300,000 during a fiscal period by falsifying or presenting false documents. In cases not subject to criminal law, such offences could nevertheless result in fines of up to three times the evaded tax if the tax authorities become aware of the situation without a voluntary disclosure from the taxpayer.
In view of these tougher regulations and stepped-up efforts by the tax authorities in this area, it is time for those who could be affected to take appropriate steps, including by filing a voluntary disclosure. Usually this makes it possible to regularise one’s past without having to pay a fine.
A voluntary disclosure enables a taxpayer to report income and assets to the tax authorities at his own initiative. The ensuing summons to pay is limited to interest in arrears and the tax that would normally have been due. In the canton of Neuchâtel, overdue interest is charged at the rate of 3% and only for 2015 and 2016. The federal government is moreover studying the idea of a general tax amnesty at the national level.
Tax restatements are calculated over the past ten years, except on inheritance in which case only the past three years are restated (provided the heirs file a voluntary disclosure quickly). These situations require very special attention, however; in the case of an account that was opened in the name of both spouses, for example, the period counted is ten years for the surviving spouse as co-owner of the account.
The specialists at Bonhôte Services SA are able to analyse each particular case with a view to ensuring tax efficiency and the best possible estate planning. In the event of a voluntary disclosure our experts can also help by representing the client from the start of the process to its conclusion.
Finally, it is also worth noting the results of two recent referendums. On 14 June of this year, Swiss voters rejected the initiative to slap a tax of up to 20% on inheritance. This is excellent news, especially for small and medium-sized businesses in our country. The previous popular vote, on eliminating expense-based taxation of wealthy foreigners, also failed to pass. These two decisions have added some lustre to Switzerland’s image, which has been badly tarnished lately by legal and tax issues.