The International Convention on the automatic exchange of bank information entered into force on January 1st, a move that will allow Switzerland no longer be considered a tax haven.
With the implementation of the ‘Multilateral Convention on Mutual Administrative Assistance in Tax Matters’, Switzerland complies with international fiscal standards, which guarantees that the financial information of bank accounts of citizens from some countries will be shared annually.
Switzerland will start collecting data in 2017 and share it with selected countries in 2018. These countries will do the same with the Swiss assets.
To avoid losing its status as a global financial center, Switzerland signed the convention in 2014. The Swiss Parliament approved the agreement in 2015 and the treaty was ratified in 2016.
Switzerland, which manages 25% of the foreign assets deposited in its 266 banks, will say goodbye to its sacred banking secrecy, which dates from 1934: it has allowed it to attract fortunes for decades, but it had been cracked in recent years due to international pressure.
Although it will not start exchanging banking data until 2018, in practice, it buries the banking secrecy when starting the necessary steps to deliver the information of this exercise of its foreign clients.
Outside pressure, especially from the United States, has slowly undermined bank secrecy until makes it disappear.
According to the Swiss Association of Bankers (ASB), Switzerland is the unquestioned leader in the management of private fortunes of foreigners, accounting for 25% of the global share of this business.
Switzerland only provided information to countries with which it had an agreement to avoid double taxation, but the cooperation was not guaranteed since the administration had to prove that the bank account holder had evaded taxes.