Most Read Contributor in Switzerland, February 2017
On July 23, 2015, the Dutch tax authorities filed with the
Federal Tax Administration Agency in Switzerland a request for
international tax assistance in order to identify prospective Dutch
taxpayers through certain group criteria but w/o providing the
specific names of those potential taxpayers. The request targeted
holders of bank accounts with UBS in Switzerland (this between
February 1, 2013, and December 31, 2014), who had a (tax) domicile
address in the Netherlands, and who did not comply with a previous
UBS-notice to confirm their tax conformity for the Netherlands.
The Swiss Federal Tax Administration Agency approved this group
inquiry in a decision of November 25, 2015, which was now upheld by
the Swiss Federal Supreme Court on September 12, 2016 (but only
published last week). The decision of Switzerland's highest
court is a leading case as it sheds light on the various double
taxation treaties concluded by Switzerland since 2009 in order to
establish conformity with OECD-standards which allow since 2012
so-called group inquiries.
"The Swiss Federal Supreme Court clarified the much
disputed topic as to whether Switzerland's International Tax
Assistance Act of 2012 prevails over the country's tax treaties
concluded since 2009."
The applicable Swiss/Dutch taxation treaty was amended on
November 9, 2011, in order to bring it in line with information
exchange standards of the OECD Model Convention on Income and
Capital Taxation, which basically allows group inquiries since July
17, 2012 (the date when the official OECD-Commentary gave its
interpretation to that end), whilst the amended treaty wording
still required that the tax authority requesting certain tax
relevant information provide the specific names of the potential
taxpayers. Furthermore, Switzerland enacted on September 28, 2012,
an International Tax Assistance Act, which allows group inquiries,
so a dispute arose in first instance as to whether this act should
prevail over the Dutch/Swiss Treaty or vice versa.
In its September 12, 2016 decision, the Swiss Federal Supreme
Court clarified the latter much disputed topic by saying that
Switzerland's International Tax Assistance Act of 2012 cannot
overrule the tax treaties concluded by Switzerland with foreign
countries since 2009, since it was enacted only to secure the due
execution of international tax assistance inquiries.
"The hightest court in Switzerland considers the Dutch
tax assistance request as a classical
In other words, the Swiss Federal Supreme Court held that the
issue of permitted group inquiries vs. non-permitted fising
expeditions should be decided by exlusively referring to the
applicable tax treaty. The Swiss Federal Supreme Court argued that
Art. 26 of the Dutch/Swiss tax treaty amended as per November 9,
2011, should be interpreted by referring to a subsequent protocol
and a memorandum of understanding signed by the two countries which
provide in conjunction that an international tax assistance request
does not necessarily have to indicate specific names of potential
taxpayers, as long as other information submitted through an
international tax assistance request is sufficiently specified. The
hightest court in Switzerland thereby considered the additional
information provided by the Dutch tax authorities in its request
for international tax assistance of July 23, 2015 (see above) as
sufficient, though the court spoke at the same time of a
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