The Swiss Federal Administrative Court has just published a judgment holding that, in the scope of an international request for administrative assistance in tax matters, information about a Swiss trustee and one of the trusts it administered cannot be transmitted to the foreign (French) authority unless there is actual suspicion of tax fraud.
A et B v. Administration fédérale des contributions, A-7131/2014, Cour I, Tribunal administrative fédéral, arrêt du 1er juin 2015
Summary of Facts:
In April 2014, French authorities sent no less than 4 requests for administrative assistance in tax matters to Switzerland, concerning 2 persons (A and B) who had relocated to this country prior to 2010 (and who were enjoying life on a lump-sum tax basis ever since). The requests related to the French tax years 2010-2011.
2 of these requests also mentioned 2 Swiss trustee companies (C and D) and a trust (E) as “targeted persons in Switzerland”.
Executing the request, the Swiss tax administration compelled a Swiss bank, C, D and E to produce information. D answered that it had never administered any trust settled by A and B, nor were they beneficiaries of such trusts. E disclosed detailed information about a trust including the trust deed and the 2011 financial statements.
The Swiss tax administration rendered a decision granting assistance and transmitting, among others, D’s answer. A and B challenged this decision.
The Court’s holding:
Swiss trustees and the trust were mentioned in the requests as “targeted persons in Switzerland”, but the French authorities didn’t allege that these entities were liable to taxation in France. Accordingly, the Court confirmed its precedents whereby such a request was insufficient to grant international administrative assistance. The Court thus removed all information relating to the trust and the trustees (C, D and E) from the file to be transmitted to France.
Moreover, going beyond the Swiss tax administration’s decision, the Court also removed from the file all information pertaining to Swiss bank accounts where the targeted taxpayers were (merely) signatories or beneficial owners – thus leaving only the bank accounts opened in A and B’s names.
The judgment makes an interesting read, as it lists the detailed trust information that the French authority was trying to collect (in 2014).
This judgment of 1 June 2015 (in French) is available here