Administrative assistance and criminal tax law on both sides of the border

Administrative assistance on request after 2015

The exchange of information on request remains the instrument of choice when a tax authority investigates a specific taxpayer or group. Chapter E.II describes how the Protocol of 23 February 2015 brought Art. 27 of the Swiss-Italian convention into line with the OECD standard. It also explains how the Swiss courts decided the Italian group request concerning recalcitrant clients of a large Swiss bank and how the procedure under the Tax Administrative Assistance Act works in outline. The present section adds three points of practice that matter for Lugano: the limits on requests based on stolen data, the notification of persons concerned and the relationship between administrative and criminal assistance.

Under Art. 7 lit. c TAAA, Switzerland does not enter into a request that violates the principle of good faith, in particular when it is based on information obtained through acts punishable under Swiss law.¹ The provision was a reaction to the purchase of stolen bank data by foreign states. The Federal Supreme Court has interpreted it narrowly. It held that a request based on stolen data is admissible when the requesting state did not buy the data and obtained them through ordinary channels, such as administrative assistance from a third state. A further condition is that the state has not given an assurance that it will not use such data.² Italian requests have rarely raised this issue, because Italy did not buy data and because the Italian authorities had other sources: the voluntary disclosures of 2015 and 2017, CRS data from 2018 and their own investigations.

The persons concerned are notified before the transmission and have a right of appeal to the Federal Administrative Court (Art. 14 and 17 ff. TAAA). Where the person concerned lives abroad, the Federal Tax Administration asks the holder of the information, usually the bank, to have him designate a representative in Switzerland. It may notify him directly where the law of his state of residence allows service by post, and otherwise through the requesting authority or by publication in the Federal Gazette. In exceptional cases the notification can be deferred until after the transmission when the requesting state shows that prior notification would compromise the purpose of the request (Art. 21a TAAA).³ The Global Forum criticized the delays that this procedure can cause, as shown above. For the Lugano bank the duty to forward the notification to a client who has moved abroad, or who has died, is part of daily practice.

Swiss criminal tax law: evasion, fraud and the qualified tax offence

Swiss criminal tax law distinguishes between tax evasion and tax fraud, a distinction that Chapter E.II explains in its historical function. Tax evasion under Art. 175 of the Federal Act on Direct Federal Taxation (DBG, Legge federale sull'imposta federale diretta, LIFD) is an administrative offence punished with a fine. The fine is normally equal to the tax evaded and may be reduced to one third in cases of slight fault or raised to three times in cases of serious fault.⁴ It is prosecuted by the tax authorities in a procedure that combines the assessment of the tax with the imposition of the fine. A taxpayer may report himself once in his lifetime without a fine under the rules on voluntary disclosure (Art. 175 para. 3 DBG), which have been available since 2010.⁵ Tax fraud under Art. 186 DBG is a criminal offence. It is committed by a person who, for the purpose of tax evasion, uses forged, falsified or untrue documents such as business accounts, balance sheets, income statements or salary certificates to deceive the tax authorities. The penalty is a custodial sentence of up to three years or a monetary penalty, and the offence is prosecuted by the cantonal criminal authorities.⁶ The corresponding provision for cantonal taxes is Art. 59 of the Tax Harmonization Act. For withholding tax, stamp duties and value added tax the Federal Act on Administrative Criminal Law applies, with the offence of fraud in matters of contributions under Art. 14 VStrR.⁷

Since 1 January 2016 a qualified tax offence has been a predicate offence to money laundering under Art. 305bis para. 1bis SCC. The provision covers the offences of Art. 186 DBG and Art. 59 para. 1 StHG where the taxes evaded exceed CHF 300,000 per tax period.⁸ Chapter E.II discusses the consequences for financial intermediaries and Chapter G.III the place of the provision in the Swiss anti-money laundering system. Under Art. 305bis para. 3 SCC the offence also applies where the predicate offence was committed abroad and is punishable there. Swiss practice applies the test of double criminality in substance: the foreign conduct must correspond to a qualified tax offence as defined in Swiss law, including the use of false documents and the threshold of CHF 300,000. An Italian dichiarazione fraudolenta mediante uso di fatture o altri documenti per operazioni inesistenti (Art. 2 of Legislative Decree No. 74/2000) will normally meet this test if the amount is high enough. A mere omessa dichiarazione without false documents will not.

Notes

1. TAAA (above), Art. 7 lit. c, https://www.droit-bilingue.ch/de-fr/6/65/651.1-7-12.html. ↩
2. Federal Supreme Court, judgment 2C_648/2017 of 17 July 2018, concerning a French request based on data stolen from HSBC Private Bank (Suisse) and transmitted to France by another channel. ↩
3. TAAA (above), Art. 14 (information of persons entitled to appeal, including persons abroad), https://www.droit-bilingue.ch/de-fr/6/65/651.1-14-19.html; Art. 17 (final decree), https://www.droit-bilingue.ch/de-fr/6/65/651.1-17-23.html; Art. 19 (appeal procedure), https://www.droit-bilingue.ch/de-fr/6/65/651.1-19-26.html; Art. 21a (subsequent notification), https://www.droit-bilingue.ch/de-fr/6/65/651.1-21a-29.html. ↩
4. Federal Act on Direct Federal Taxation of 14 December 1990 (DBG), SR 642.11, Art. 175 paras. 1 and 2, https://www.droit-bilingue.ch/de-fr/6/64/642.11-175-196.html. ↩
5. DBG, Art. 175 para. 3 (first voluntary disclosure without penalty; para. 4 reduces the fine to one fifth for any further disclosure), in the version of the Federal Act of 20 March 2008 on the simplification of the subsequent taxation of heirs and the introduction of the penalty-free voluntary disclosure, in force on 1 January 2010, https://www.droit-bilingue.ch/de-fr/6/64/642.11-175-196.html; Art. 181a for legal entities, inserted by the same Act, https://www.droit-bilingue.ch/de-fr/6/64/642.11-181a-203.html. ↩
6. DBG, Art. 186 para. 1, https://www.droit-bilingue.ch/de-fr/6/64/642.11-186-208.html, and Art. 188 para. 1 (report by the cantonal administration to the authority competent for prosecuting cantonal tax offences), https://www.droit-bilingue.ch/de-fr/6/64/642.11-188-210.html. ↩
7. Federal Act on the Harmonization of Direct Taxes of the Cantons and Communes of 14 December 1990 (StHG), SR 642.14, Art. 59 para. 1, https://www.droit-bilingue.ch/de-fr/6/64/642.14-59-93.html; Federal Act on Administrative Criminal Law of 22 March 1974 (VStrR), SR 313.0, Art. 14 para. 2, https://www.droit-bilingue.ch/de-fr/3/31/313.0-14-17.html. ↩
8. Art. 305bis paras. 1bis and 3 SCC, German and English text in droit-bilingue.ch, https://www.droit-bilingue.ch/de-en/3/31/311.0-305bis-372.html (para. 3: liability "where the main offence was committed abroad"); Lenz & Staehelin (above), on the threshold of CHF 300,000 and the reference to Art. 186 DBG and Art. 59 para. 1 StHG. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.