Switzerland Strengthens Tax Transparency with EU

The Swiss Federal Council launches a consultation process on an Amending Protocol to the existing Agreement between Switzerland and the EU concerning the automatic exchange of financial account information (AEOI). Initially implemented in 2017, the Agreement, which ensures the automatic exchange of information and includes provisions granting exemptions from withholding tax on dividends, interest, and royalties between related entities, will be aligned with the revised OECD standard.

Consultation and Implementation Timeline

The new Amending Protocol on the Swiss-EU exchange of tax information, signed in Brussels on October 20, 2025, brings new rules on mutual administrative assistance between Switzerland and the EU for the recovery of VAT-related tax claims. To increase administrative efficiency, only claims exceeding a set minimum amount may be requested, and the assisting jurisdiction may retain a lump-sum payment to cover administrative costs.

Both the EU and Switzerland agreed to examine, within 4 years, the feasibility of expanding cooperation to include the recovery of other tax claims, though no outcome has been predetermined. Notably, none of the existing provisions, such as those on withholding tax exemptions for related entities, will be amended and will remain in place.

The main reason this procedure and amendments were initiated and proposed is Switzerland’s obligation to comply with the updated OECD standard, and they are unrelated to the broader negotiations concerning the Switzerland-EU package of bilateral agreements.

The consultation remains open until February 6, 2026, after which the Protocol will be submitted to Parliament for approval. Even though the Federal Council plans to apply the updated OECD technical provisions for AEOI from January 1, 2026, the new provisions on administrative assistance for the recovery of VAT claims will not be influenced.

Conclusion

The Amending Protocol further tightens Switzerland’s alignment with international transparency standards while adding a cautious, administratively aware framework for VAT claim recovery. Taxable persons should take the necessary steps to prepare for upgraded AEOI reporting processes. Since the determining qualifying factor is the threshold, taxable persons should monitor how this matter will be finalized.

Source: Swiss Government Portal