Australia and Switzerland plan treaty revision

The Government has announced its intention to update the tax treaty between Australia and Switzerland.

Negotiations for the revised treaty, which was announced in February 2011, were recently completed.

A revised treaty would overcome long-standing bank secrecy provisions through bolstering administrative assistance between the two countries' revenue authorities and also improve tax transparency and tax information exchange, the Government said.

It said the amendments would also promote investment between the two countries.

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Switzerland was Australia's fifth largest source of foreign direct investment and sixth largest overall investor in 2011, it said. Direct investment into Australia amounted to A$23 and overall investment A$42 billion, while Australia's foreign direct investment in Switzerland was A$6.2 billion.

Subject to domestic approval processes, both countries will sign the revised treaty at the nearest convenient time.

The Organisation of Economic Cooperation and Development (OECD) and G20 have been investigating ways to improve cross-border tax transparency and put an end to base erosion and profit shifting.

The Global Forum was set up in 2000 to agree global tax standards. It has published 100 peer reports since 2009, when the G20 called for an internationally agreed standard of bank information exchange. Of the 119 member countries, most have reviewed their legal frameworks and moved on to assess information exchange networks. According to the OECD, the Global Forum plans to rate countries' implementation of the standards on a four-tier classification system.