Voluntary disclosure • what you need to know

Didn’t my parents sign over an offshore account some time ago?

I own a property abroad that I’ve never included in the Swiss Tax dec­la­ra­tion since the property is situated abroad

Does this sound familiar to you?
Or is there a similar scenario sitting heavily on your stomach for years because you may be insecure whether the assets have been declared correctly for tax purposes – or whether they have been declared at all?

Black money, tax evasion, auto­matic ex­change of in­for­ma­tion in tax matters… Or­di­nar­ily one does not like to deal with these issues. For the people con­cerned they often come with worries and in­se­cur­ities and may lead to emo­tio­nal strain.

There may be dif­fer­ent reasons why assets re­main un­taxed, re­spec­tive­ly why bank accounts are not de­clared to the tax authorities – saving taxes may only be one of many reasons.

It may take some time for the person concerned to eval­uate the situ­ation and to weigh the options before he or she even­tually decides to clear the air. After all, the assets might have been un­de­clared for centuries and a change of mind­set may not always be easy for the people in­volved.

In my expe­rience as a certified tax expert I have ad­vise numerous people during their assess­ment process and it has re­peated­ly been brought home to me how severely such situations can put a strain on the people con­cerned and their entire families.

The good news is that from a fiscal point of view these matters can rather easily be mended. Since 2010 the Swiss tax law knows the “small tax amnesia”, which en­tailed the possibility of non-­punish­able voluntary dec­la­ra­tions.


Non-­punishable voluntary dis­clo­sure – what does that mean?

There are two main scenarios of a non-­punish­able voluntary dec­la­ration of assets:

First, when a person subject to tax voluntarily declares tax evasion for the first time, the person will not be sub­jected to criminal sanctions. However, retro­active tax and late interest on the respective amount have to be paid for these tax periods.

In the second scenario, the person con­cerned has inherited un­declared assets and may wish to submit a non-­punishable voluntary de­cla­ration. Where the heirs notify the tax authorities that the deceased person has not correctly de­clared all tax factors, the retro­active tax­ation on the assets only concern a time period of three years before the moment of de­cease instead of the ordinary ten years period.

Conditions of a non-­punishable voluntary dec­la­ra­tion:

The tax payer
submits a voluntary de­claration for the first time;
has become active on its own initiative, i.e. the tax authorities had no prior know­ledge of the relevant cir­cum­stances;
has to cooperate with the tax authorities without reservation in order to solve the matter;
has to under­take a serious effort to pay the retro­active tax and late interests.








Why now?

When the voluntary dis­clo­sure was first in­tro­duced in Switzerland in 2010, it was the general as­sump­tion that the number of voluntary dec­la­ra­tions would rise in the first few years and flatten in sub­se­quence. According to the latest figures, how­ever, there has never been as many voluntary dis­clo­sures in Switzer­land as in the year 2014.

Because four years after the in­tro­duc­tion of the “small tax amnesia” the number of voluntary dis­clo­sures has not yet de­creased, politicians have claimed to limit its application in time. Whether these political requests have any chance of success remains uncertain.


In principle the non-­punishable voluntary dis­clo­sure can be submitted in any form.

It is essential that the person concerned discloses all un­declared assets once and for all – as the voluntary dec­la­ra­tion goes un­punished only the first time.

For the pur­poses of sub­stan­ti­ation, however, I suggest to submit the dec­la­ra­tion well doc­u­mented and in writing. Given the importance and the potential con­se­quences of an in­correct or in­complete dec­la­ra­tion of assets it is further rec­om­mend­ed consulting a certified tax expert to establish the relevant facts and to support you with the prep­a­ration of such dec­la­ra­tion.

Thus, I personally entrust to everybody to fully disclose all assets sooner rather than later.


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