24-11-2011
New tax treaty with Switzerland; exchange of information on foreign bank accounts

New tax treaty  with Switzerland becomes effective
On 9 November 2011 the new tax treaty between the Netherlands and Switzerland became effective. This tax treaty replaces the original treaty dating from 1951. Contrary to the old treaty, the new treaty contains a provision for the exchange of information between the Netherlands and Switzerland. It is possible for the Netherlands to file an application with retroactive effect for information relating to the period from March 2010.

More effective hunt for  undeclared assets
For some time now the Tax Inspectorate has been actively engaged in tracing the foreign undeclared assets and income of  Dutch nationals. This forms part of a global trend in which tax authorities from numerous countries combine forces to achieve a joint goal. This collaboration is strengthened by  provisions embodied in tax treaties, European Directives on the exchange of information and agreements specifically established for the exchange of information for tax purposes (so-called TIEA's).   

The introduction of the new tax treaty with Switzerland has expanded the scope to obtain details of Dutch savings concealed in Swiss bank accounts. The treaty  namely creates the possibility to file a request for information concerning Swiss-held bank accounts with retroactive effect to March 2010. The Netherlands has also signed an additional agreement with Switzerland, as a result of which the Tax Inspectorate can now obtain information without knowing the precise name of the individual involved. Other details, such as a bank account number, can in future suffice as a basis on which to submit a request for information. In principle, Swiss banking secrecy is no longer a guarantee that Swiss bankers will not divulge information about their account holders.

Dutch voluntary disclosure scheme
Taxpayers have the possiblity to voluntarily  remedy the failure to comply with their tax obligations on foreign income and assets. Dutch tax legislation provides taxpayers with a favourable scheme, under which they have the opportunity to correct a income tax return that has already been filed. However, in order to make use of this voluntary disclosure scheme  the Tax Inspectorate must not be aware that the income tax return is incorrect. An additional prerequisite is that the taxpayer cannot reasonably suspect that the Tax Inspectorate will discover the incorrectness of the tax return. Once questions are raised by the Inspectorate  concerning the foreign assets then in principle it is no longer possible to make use of the voluntary disclosure scheme.

More information
More information about the new tax treaty  can be obtained, without any further obligation, from Chris van Wijngaarden (chris.vanwijgaarden@vmwtaxand.nl) or Abdelmajid Ettafahi (abdelmajid.ettafahi@vmwtaxand.nl). They can also provide you with additional information about the Tax Inspectorate’s voluntary disclosure scheme for  undeclared foreign assets.