International administrative assistance for tax purposes

Luis moved from Argentina to London a few years ago. He likes to spend the English winter in the Spanish sun in Andalusia and also enjoys spending a few weeks there in the summer as well. The Spanish tax authorities now suspect that Luis lives in Spain and want to tax him accordingly.

Luis complies with the Spanish tax authorities' request to submit information within the deadline. As a result, the Spanish tax authorities learn that Luis has a Swiss credit card. After Luis refuses to provide detailed transaction information on the credit card, the Spanish tax authority wants to request the information, including data on the associated account, directly from the credit card issuer and the bank in Switzerland via the Swiss Federal Tax Administration (SFTA).

1. In a first step, the Spanish authority requests Switzerland to transmit the information and sends a corresponding request. In particular, it must explain the purpose for which it requires the requested information, the period for which it is requesting the documents and why they are foreseeably relevant for achieving the stated purpose. In addition, it must confirm, among other things, that it cannot obtain the information itself because it has exhausted all national means.
2. The SFTA will examine the inquiry and then request the credit card issuer and the bank to provide the SFTA with the requested information. The SFTA then examines the documents received and redacts any information that it considers should not be exchanged. At the same time, the SFTA must inform Luis of the request. As Luis is not domiciled in Switzerland, the SFTA asks the credit card issuer and the bank to request Luis to designate a person in Switzerland who is authorized to receive official information. If Luis cannot be informed in this or any other way, the information and the request to designate a representative will be made by publication in the Federal Gazette.
3. After having designated a representative, Luis will be served with the essential parts of the request. In addition, he has the option of requesting access to the file in order to obtain all documents relating to the proceedings, including correspondence between the SFTA and the information holders.
4. Luis may then consent to the transmission of the information by the SFTA. In this case, the SFTA transmits the information to the Spanish tax authority in a simplified procedure and closes the case. It does not issue a final ruling.
5. If Luis does not agree to the simplified procedure, it is up to him to submit a statement to the SFTA. In this statement, he can argue why information or documents should be excluded in their entirety or shared only with additional redactions. In practice, this is a highly relevant point, as the early submission of missing redactions can, if necessary, prevent an appeal procedure and thus also unnecessary costs and efforts.
6. Taking into account the arguments put forward by Luis, the SFTA issues a final ruling. In it, it decides which information and documents are to be exchanged and in what form. The decision must contain a statement of reasons and instructions on how to appeal.
7. Luis may lodge an appeal against the final ruling with the Federal Administrative Court within 30 days. The appeal must state the reasons why administrative assistance should not be granted or should only be granted in part. The appeal has suspensive effect, which means that the information will not be exchanged until the Federal Administrative Court has ruled.
8. Accordingly, an appeal of a dismissive decision of the Federal Administrative Court to the Federal Supreme Court is only permissible in rare cases in which a legal question of fundamental importance arises.

By taking action in good time and appointing a representative in Switzerland, Luis can ensure that the information is carefully checked before being transmitted and, where possible, not transmitted at all.