Switzerland Strengthens Tax Transparency with EU

October 29, 2025

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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

What is the purpose of the new Amending Protocol between Switzerland and the EU?

The Amending Protocol aims to align Switzerland’s automatic exchange of financial account information with the updated OECD standard and introduce new administrative assistance rules for VAT claim recovery.

When was the Amending Protocol signed?

The Amending Protocol was signed in Brussels on October 20, 2025, marking a step toward closer tax cooperation between Switzerland and the EU.

What are the key changes introduced by the Protocol?

The Protocol adds new rules for mutual administrative assistance in recovering VAT-related tax claims and sets thresholds for when assistance can be requested. It also allows jurisdictions to keep a small payment to cover administrative costs.

Will existing provisions on withholding tax exemptions change under the new Protocol?

No, the existing provisions on withholding tax exemptions for dividends, interest, and royalties between related entities remain unchanged.

What is the timeline for consultation and implementation?

The consultation period runs until February 6, 2026. After that, the Protocol will be submitted to Parliament for approval, with OECD technical provisions expected to apply from January 1, 2026.

How does this Protocol affect taxable persons in Switzerland?

Taxable persons should prepare for enhanced AEOI reporting processes and monitor developments regarding the threshold for VAT claim recovery requests, as these will determine the scope of future obligations.

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