Switzerland: Changes to AEOI provisions effective 1 January 2021

Switzerland: Changes to AEOI provisions

A revised Swiss AEOI Federal Act and Ordinance will be effective beginning 1 January 2021.

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The Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) reviewed Switzerland’s compliance with the Automatic Exchange of Information in Tax Matters (AEOI) and raised several recommendations for Switzerland. Most of the recommendations have now been implemented by the Swiss Federal Council, and a revised Swiss Federal Act and Ordinance will be effective as of 1 January 2021.

The Swiss federal tax administration is expected to issue amended guidance in due course.


New requirements

  • As of 1 January 2021, new accounts can (with few exceptions) only be opened if a self-certification, including a taxpayer identification number (TIN), is provided. The former two-year period to obtain the TIN no longer applies for accounts opened on or after 1 January 2021. A TIN is still not required when the account holder’s jurisdiction does not issue a TIN or the domestic law of the relevant jurisdiction does not require the collection of the TIN.
  • All “trustee documented trusts” are to be registered in the Swiss tax authorities AEOI portal, stating “TDT” in their name. They must also include the trust name and the suffix “TDT” in the trust’s common reporting standard (CRS) reporting.
  • All applicable account value thresholds are to be denominated in the U.S. dollar (USD) and no longer in the Swiss franc (CHF).

KPMG observation: The denomination of account value thresholds in USD will be relevant for the first time as of 31 December 2021, so Swiss banks have sufficient time to adjust their systems. Tax professionals believe it is interesting that the denomination in U.S. dollar was raised as an issue even though the United States does not participate in the common reporting standard (CRS) regime.

  • Swiss condominium owners’ associations and co-ownership associations, currently treated as non-reporting financial institutions, will be treated as non-financial entities (NFEs).

KPMG observation: The new provisions regarding Swiss condominium owners’ associations and co-ownership associations, as well as accounts exempt in the jurisdiction of the account holder (typically not relied on by Swiss financial institutions), are viewed as having limited effects on Swiss financial institutions in practice.

  • Swiss financial institutions will no longer treat an account as exempt on the basis that the account is exempt based on the regulations in the jurisdiction of the account holder.


Changes not implemented

  • It was proposed that Swiss associations and foundations that hold the status as not-for-profit or charitable organizations would no longer be treated as non-reporting financial institutions.
  • It was suggested to limit the exemption for certain capital contribution accounts to 90 days (after which the accounts would need to be documented).

These proposals were not adopted.


KPMG observation

Swiss financial institutions need to review their account opening procedures for 2021 to determine they are in line with the new requirements. The registration of trustee documented trusts is simply a confirmation of the Swiss federal tax administration’s practice as stated in its CRS guidance.


Read a December 2020 report prepared by the KPMG member firm in Switzerland

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