On October 15, 2013 the Swiss signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
As provided in the press reports.
“The Multilateral Convention provides for all forms of mutual assistance: exchange on request, spontaneous, tax examinations abroad, simultaneous tax examinations and assistance in tax collection, while protecting taxpayers’ rights. It provides the option to undertake automatic exchange while requiring an agreement between the Parties interested in this form of assistance. With the support of the G20, automatic exchange is becoming the new international standard, and Switzerland adheres to an instrument that will allow it, in due time, to join the jurisdictions that will decide to exchange financial information automatically”
The agreement when coupled with the recent agreement deferred prosecution agreements between the U.S. Department of Justice and certain Swiss banks would clearly imply that Swiss banks will cooperate in a major way in the investigation of tax cases.
The cooperation of the Swiss should cause many taxpayers who have unreported Swiss accounts (however structured) to come forward, particularly those who are dual nationals. Example: A citizen of Country A is a permanent resident or citizen of the U.S. as well. The person has Swiss accounts unreported to his/her country of origin and the U.S. That person is now at risk in both countries for tax and potentially other civil and criminal violations. The risk is not limited to holders of Swiss accounts, for the OECD (the G-20 countries) has set as it goal international tax transparency by the end of 2015.
While there may still be places to hide it is a better approach for U.S. taxpayers to come forward and enter the Offshore Voluntary Disclosure Program (OVDP) than to run the risk of serious civil and criminal penalties ( FBAR penalties, tax evasion and tax fraud).