The decision of Switzerland to hand the details of foreign bank accounts to other countries
By way of introduction we must mention the vision of the 44 countries that have set a deadline of September 2017 for reporting investors’ tax details to their home governments aimed in mitigating or even eliminating the place for tax evasion.
Switzerland the world’s largest offshore financial center agreed along with other counties to sign up to a new global standard on automatic information exchange putting an end to the problem of transparency and the protection of the privacy of banking clients.
This was imperative after a series of tax scandals over the last years. This decision requires countries to be able to collect and exchange information on bank accounts and the beneficial ownership of companies and other legal structures such as trusts. Switzerland is willing to adopt this automatic exchange information, provided that the exchange of information is only applied for tax purposes and not for any other reason that could jeopardize the privacy between client and banks.
What this means for the Cyprus Tax authorities is that they will have an additional tool to collect taxes that previously were impossible due to not imposition of available information. With this pioneer plans that these 44 countries are considering adopting, it will minimize the cost of investigations from the tax authorities from one hand and increase the information available to the tax authorities from the other. The details to be reported include interest income, dividends, account balance, income from certain insurance products, sale proceeds from financial assets and other income generated from assets held in the account.