Voluntary Disclosures Argentina: Approval of the “Plan”

As a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, Argentina is participating in the Automatic Exchange of Information (AEOI), which will enter into force in 2017. To regularize unreported assets, Argentina is launching a voluntary disclosure program of unreported assets located within Argentina and abroad, called “Plan” (sistema voluntario y excepcional de declaracion de tenencia de moneda nacional, extranjera y demas bienes en el pais y en el exterior, llamado “Plan”).

The Argentine Congress approved the “Plan” on June 29, 2016. The next step is the promulgation by the Executive Branch to be legally valid.

The application period will be from the date of the promulgation until March 31, 2017. Costs of regularization, which will be paid to the tax authority, are dependent on the date of report: They will vary from 0% to 15% of the asset´s value.

Voluntary Disclosures international: Current developments

Luxembourg: Tightening of the regulations for Voluntary Disclosures from 1 January 2016

The regulations for Voluntary Disclosures in Luxembourg are to be tightened from 1 January 2016. A draft bill is accordingly available, which envisages a Voluntary Disclosure (or “repentir actif”) to avoid punishment up to and including 31 December 2015. From 1 January 2016 further penalty payments must be paid in addition to the due tax debts. According to the draft bill the monetary amount which is to be paid is 10 % of the evaded taxes. For Voluntary Disclosures, which are submitted from 1 January 2017, the payment of a monetary amount is envisaged in the amount of 20 % of the evaded taxes.

Russia: Extension of the Voluntary Disclosure programme until 30 June 2016

According to media reports the law governing the capital amnesty in Russia was extended until 30 June 2016. Under certain pre-requisites a Voluntary Disclosure to avoid punishment is accordingly possible.However, it has not been determined yet whether a repayment of the non-declared foreign assets or offshore companies to Russia will be necessary over the course of a Voluntary Disclosure.

Swiss Federal Tax Administration supplied data to Dutch tax authorities owing to a group enquiry

According to media reports the Swiss Federal Tax Administration (ESTV) supplied data to the Dutch tax authorities owing to a group enquiry. Switzerland looked into the group enquiry of the Netherlands of 23 July 2015. It was not possible to supply the requested data after the deadline for an appeal for the clients concerned has expired.

The wording of the group enquiry was published in the Swiss Bundesblatt [federal gazette]: LINK TO THE WORDING

It remains to be seen which implications this development will have for Germany. In any case there is now for the first time a pre-formulated example of an admissible group enquiry to Switzerland.

Taxation of capital income in Germany

The Federal Finance Court confirms with regard to fund income from third countries the constitutionality of the flat-rate taxation according to Section 18 Par. 3 S. 1 and S. 4 AuslInvestmG [Foreign Investment Act]

With the judgement of 28 July 2015, file no.: VIII R 2/09, published on 9 December 2015, the Federal Finance Court (BFH) confirmed the constitutionality of the flat-rate taxation according to Section 18 Par. 3 Sentence 1 and Sentence 4 Foreign Investment Act (AuslInvestmG) limited to its field of application of income from investment funds with the registered seat in a third country. The Federal Finance Court states that the standard with regard to third country funds neither breaches the general principle of equal treatment of Art. 3 Par. 1 Basic Law [GG], nor does the flat-rate taxation lead to an excessive taxation which breaches Art. 14 Par. 1 Basic Law.

New regulations for the combatting of money laundering as of 1 January 2016 in Switzerland

As of 1 January 2016 new regulations came into force in Switzerland for the combatting of money laundering. The international standards for the combatting of money laundering (Anti Money Laundering, AML) are accordingly implemented. Among others, stricter duties of care are to be complied with. Since 1 January 2016 tax fraud is deemed as a predicate offence to money laundering if the evaded taxes exceed an amount of CHF 300,000.00 per tax period. In case of a suspicion of such a criminal offence, financial intermediaries, in particular banks, have to report the customer concerned to the responsible money laundering authority immediately. Further investigations against bank employees in Switzerland owing to aiding and abetting tax evasion According to various media reports German criminal prosecution authorities have initiated further investigations against employees of the Swiss branch of a major international bank. The investigations refer to a possible punishability owing to aiding and abetting tax evasion.

Implications of the introduction of the automatic tax information exchange on the EU Savings Tax Directive

Council of the European Union passed a Directive to abolish the EU Savings Tax Directive 2003/48/EC

The Council of the European Union accepted a Directive to abolish the EU Savings Tax Directive 2003/48/EC on 10 November 2015. The EU Savings Tax Directive was implemented into national law in Germany with the so-called Interest Information Regulation (IIR) and came into force as of 1 July 2005.

Based on the IIR interest payments to natural persons and associations of persons of a non-commercial kind must be reported by the national paying agents. The introduction of this Directive served the Europe-wide combatting of tax evasion and tax avoidance as well as to ensure a consistent taxation of capital gains within the EU. However, it was not possible to achieve these targets owing to numerous possibilities for circumvention. For example distributions and income from foundations do not have to be reported in the Principality of Liechtenstein. The field of application can also be circumvented by means of life insurance wrappers and a management of the capital assets by a joint stock company. The IIR is further not applicable to many capital investment forms and financial products.

Large-scale raid at around 120 customers of the Spuerkeess BCEE in Luxembourg

According to reports of the NDR, WDR and the Süddeutsche Zeitung the focus was supposed to have been placed in particular on customers of the Luxembour bank in Rhineland-Palatinate, the Saarland and North-Rhine Westphalia with a monetary investment of more than EUR 300,000 in the Grand-Duchy. The searches should last the whole week and more than 150 investigators should be in operation. There is also a threat of further customers being visits by the tax investigators. In total the Public Prosecutor’s Office in Cologne is supposed to have documents in its possession for more than 54,000 German customers of this bank. Due to a mistake of the seller the investigators are said to even have received the information free of charge and did not have to pay the record price in the amount of EUR 5 million. We will be pleased to be available to you as a contact if you were affected by searches or you fear that you will belong to the group of customers.
We will be pleased to examine whether a Voluntary Disclosure can be taken into consideration still in an individual case. We will also be available to you as experienced counsel in criminal proceedings. With our lawyers and tax advisors we offer you comprehensive advice.

Group enquiry of the Dutch tax administration to Switzerland successful

According to its notification of 27 October 2015 the Swiss Federal Tax Administration (ESTV) approved a group enquiry of the Dutch tax administration (Belastingdienst, Central Liaison Office Almelo, the Netherlands). The individually substantiated conclusive decrees can be viewed directly at the ESTV (Eigerstr. 65, 3003 Berne, Switzerland). These conclusive decrees contain further explanations regarding the admissibility of the group enquiry and can only be viewed by the persons concerned.

What are group enquiries?

Group enquiries concern requests for mutual assistance, with which information is requested concerning several persons, who can be identified based on precise details. These do not have to refer to a specific individual case – as customary so far according to the administrative assistance clause. A group must rather be sufficiently definable owing to specific details. The individuals concerned themselves however do not have to be identified. These do not even have to be known to the requesting authority.

On 17 July 2012 the Fiscal Committee of the OECD decided that the so-called information clause in Art. 26 of the OECD Model Convention also covers group enquiries. Consequently, since this time group enquiries are principally permitted between states, which have concluded Double Taxation Agreements with a (large) information clause according to the OECD Model Convention.

Group enquiry of the Dutch tax administration: Which account holders of the X-Bank were requested to prove proper taxation and did not provide this proof however?

The Netherlands made the following group enquiry on 23 July 2015.

The group must have fulfilled all of the following criteria from 1 February 2013 to 31 December 2014:

  • Account holder of an account/several accounts at the X-Bank
  • According to the bank-internal documentation an account holder had a domicile address in the Netherlands
  • X-Bank sent the account holder a letter, with which he was oriented about the upcoming termination of the business relationship, should the account holder not have signed and returned the form “EU interest taxation – authorization for the voluntary disclosure” within the deadline or prove its tax-conformity to the bank in any other manner
  • The account holder did not provide sufficient proof of the tax-conformity to the X-Bank, which is sufficient for the bank, despite the despatch of the afore-mentioned letter

Excluded from the transmission are accounts:

  • which at no time during the requested period featured an amount of EUR 1,500.00 or more
  • for which the account holder has provided one item of the following proof: 
    • Proof the executed disclosure of the account owing to the Treaty of 26 October 2004 between the Swiss Federation and the European Community, which corresponds with a disclosure according to the Interest Information Regulation 
    • Proof that the account holder took part in the Dutch programme for the voluntary disclosure 
    • Proof of the fiscal declaration of the account in the Netherlands
  • which were already sent to the Netherland within the framework of a request for mutual assistance

Retrospective effect of group enquiries in Switzerland

Art. 1 Par. 1 of the Swiss regulation concerning the international administrative assistance in tax matters (Tax Administrative Assistance Regulation, StAhiV) envisages that group enquiries are principally permitted for information about facts, which relate to the period of time from 1 February 2013.

Austria thus failed with a group enquiry of 16 December 2014 to Switzerland, with which all “parties who have sneaked out” should be identified, who between the signing of a compensation agreement between Austria and Switzerland on 13 April 2012 until the entry into force of this agreement on 1 January 2013, removed their financial funds from Switzerland. The period of time was before the relevant key date of 1 February 2013.

As opposed to this the Swiss Federal Court declared a group enquiry of the United States of America to be admissible in its decision of 5 July 2013 (file no.: 2C_269/2013), which also related to periods of time before the afore-mentioned key date. Accordingly a request for mutual assistance supported on Art. 26 DTA-USA 96 is to be entered into if the presentation of the facts is given with sufficient detail in order to produce a suspicion of fraudulent offences, etc. and to enable the identification of the wanted persons. The request for mutual assistance was accordingly covered by Art. 26 DTA-USA 96 irrespective of whether the persons were named. Consequently, deviating provisions of the agreement that is applicable in an individual case will have precedence over the Tax Administrative Assistance Regulation (Art. 1 Par. 2 Tax Administrative Assistance Regulation).

Ban on the so-called “Fishing Expeditions”

Nevertheless it remains to be observed that unfounded investigations, so-called “Fishing Expeditions”, are not permitted without sufficiently determined indications (e.g.: “all customers of a bank in the state X, who have their place of residence in the state Y”).

Specific features must always be connected with tax evasion.

Of course in an individual case a delimitation between an inadmissible investigation for proof and an admissible group enquiry cannot always be carried out in a clear cut manner.

Therefore, an examination and, if applicable, also the filing of a legal remedy can be all the more important.

Legal remedy by affected taxpayers

There are various possibilities to react to an admissible group enquiry.

The persons affected by the group enquiry are – without being named – are publicly requested by the ESTV to give their Swiss address (with a place of residence in Switzerland) or a person in Switzerland who is authorized to accept service (with a place of residence overseas) so that the conclusive decree can be properly served to said person.

There is further the possibility to approve the sending of the information to the requesting authority within the framework of the so-called simplified proceedings.

If no approval is declared then the ESTV will issue a conclusive decree. If this cannot be served in the absence of a transmitted address then this will be notified without naming the persons concerned  by a notification in the Federal Gazette (Art. 14a Par. 6 Sentence 1 Tax Administrative Assistance Act).

The legal remedy of an appeal can be lodged against the conclusive decree at the Federal Administrative Court with a period of notice of 30 days. The deadline will begin to apply on the day after the notification in the Federal Gazette (Art. 14a Par. 6 Sentence 2 Tax Administrative Assistance Act)


In view of the introduction of the automatic tax information exchange it remains to be seen which implications this development will have for Germany. In any case a sample is now available for a group enquired approved by the ESTV. It is to be assumed that further states will now send group enquiries to Switzerland according to the Dutch sample. Group enquiries represent an efficient possibility until the introduction of the automatic tax information exchange about financial accounts (AIA) and implementation of the Common Reporting Standard (CRS) to obtain tax-relevant data in a simple and at the same time very numerous form. Therefore, an immediate need for action is required for customers who are not yet honest with regard to tax. The risk of the discovery of an offence is increasing consistently. Our lawyers and tax advisors will of course be pleased to be of assistance to you and your customers for advice in an individual case. Disclaimer: The information contained in this Newsletter concerns non-binding information. The Newsletter should draw attention to current topics in selected fields of law, e.g. of commercial and tax law and provide initial orientation. This cannot replace legal and tax advice. The Newsletter is prepared with the greatest possible care and attention. Nevertheless, no liability can be assumed for the contents. We will of course be pleased to be available to you for further questions and for concrete advice in an individual case.

German Bundesrat approved two draft bills for the automatic tax information exchange

The German Bundesrat [upper house of the German parliament] approved two draft bills for the automatic tax information exchange (AIA) on 18 December 2015 and concurred with the German Bundestag [lower house of the German parliament].

The drafts relate to the law regarding the multilateral agreement of 29 October 2014 between the competent authorities concerning the exchange of information about financial accounts (Multilateral Competent Authority Agreement, MCAA) as well as the law regarding the automatic tax information exchange about financial accounts in tax matters and regarding the amendment to the EU Administrative Assistance Act and other laws.