The Swiss tax amnesty, more relevant than ever
Following the example of many of its European neighbours, Switzerland has a tax amnesty system allowing taxpayers to regularize their tax situation. The federal law of March 20, 2008 on the simplification of the tax reminder in case of inheritance and on the introduction of the non-punishable spontaneous denunciation provides for a partial amnesty regime with a permanent vocation. What are the details? This law has been in force since January 1, 2010 and applies to federal, cantonal and municipal taxes. It provides for two important measures:
- a simplified tax reminder for the heirs on the elements of the wealth and income evaded by the deceased
- a mechanism of spontaneous self-reporting without penalty
For the heirs: regularize the situation of the deceasedThe first of these measures allows the heirs to regularize the undeclared income of the person they are inheriting by paying the evaded taxes and the default interest due by the deceased for the last three years preceding his death. Prior to the adoption of this law, the administration could rectify this income over a period of ten years. This penalized the heir, who was often unaware of the undeclared origin of the funds. To benefit from this so-called “simplified” tax reminder, each heir must demonstrate that three conditions have been met:
- no tax authority has knowledge of the tax evasion committed by the deceased;
- the heir is willing to cooperate unreservedly with the tax authorities in the determination of the taxes;
- he/she endeavours to settle the amount due.
For all taxpayers: regularization of undeclared incomeThe second measure consists of the abolition of fines and a penal amnesty for people who have not declared some of their taxable income and who spontaneously denounce themselves. This amnesty covers taxes on income and wealth, at the communal, cantonal and federal levels, but excludes social security (AVS, etc.). Conditions similar to those listed above, concerning heirs, must be met. Thus, a tax regularization is only possible if:
- no tax authority is aware of the offence
- the taxpayer cooperates fully with the administration in determining the amount of the tax assessment
- the taxpayer pays the evaded tax and the default interest due for a maximum period of 10 years.