"We are delighted about this decision. It is the result of intensive work on Switzerland's part, which is committed to a competitive financial centre that complies with international standards," said State Secretary Jacques de Watteville, head of the State Secretariat for International Financial Matters (SIF).

The report on Switzerland's phase 1 peer review was published in June 2011, when the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) concluded that the legal and regulatory requirements in Switzerland still had to be improved and issued recommendations on three key points.

In order to implement these recommendations, Switzerland revised its Tax Administrative Assistance Act (TAAA). The revision which came into force on 1 August 2014 makes provision for an exception regarding the prior notification of persons affected by an administrative assistance request and thereby meets the requirements of the international standard for the exchange of information upon request. In certain cases, the affected taxpayers can now be informed only after their data has been transferred to requesting foreign authorities instead of in advance.

In addition, Switzerland has taken an active role in extending its network of standard-compliant information exchange agreements. It currently has 57 signed, standard-compliant double taxation agreements (DTAs) and tax information exchange agreements (TIEAs). Furthermore, on 15 October 2013, Switzerland signed the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters and on 14 January 2015 launched the associated consultation. Joining the administrative assistance convention enables Switzerland to increase the number of partner countries with which it can exchange information upon request in a standard-compliant manner.

Finally on 12 December 2014, Parliament approved the bill for implementing the revised recommendations of the Financial Action Task Force (FATF) on combating money laundering and terrorist financing, which will ensure greater transparency in the case of bearer shares. The measures adopted are not yet in force and were thus not evaluated by the Global Forum. Nonetheless, they have strengthened Switzerland's position.

In view of the measures taken, Switzerland requested a supplementary report in June 2014 to assess the progress made since June 2011 regarding the legal and regulatory framework. Following the Peer Review Group discussion in February this year, the Global Forum adopted the report in its plenary session on 13 March 2015. Phase 2 should start for Switzerland in autumn 2015. It will scrutinise Switzerland's practices in terms of administrative assistance in tax matters and will last several months. "We are on the right track and want to pursue the efforts towards a morally sound and competitive financial centre," said State Secretary Jacques de Watteville.

The Global Forum examines compliance with administrative assistance standards by means of peer reviews. The peer reviews are conducted in two phases. In phase 1, an examination is conducted to check whether the necessary legal foundations are in place for the exchange of information in accordance with the international standard. Phase 2 examines the practical application of the exchange of information. After both phases have been concluded, an overall rating is awarded. If a country is of the opinion that if fulfils the recommendations of the Global Forum, it can request a supplementary report. As at 31 December 2014, the Global Forum had conducted 183 reviews and awarded 76 overall ratings. The Global Forum has more than 120 members.

Federal Department of Finance