Spontaneous tax reporting and regularisation
As of 1st January 2010, legal and natural persons may ‘regularise’ certain elements of their tax declarations. The concept of self-denunciation thus enables taxpayers to regularise their tax situation whilst avoiding criminal proceedings.
The implementation in 2018 of automatic exchanges of information with the European Union will provide tax authorities with access to information regarding Swiss taxpayers abroad and will enable them to verify that their assets have been correctly declared. There is still time to make sure that your affairs are in order!
Who can benefit from spontaneous reporting?
All taxpayers, whether a company or a natural person, may regularise their situation via spontaneous self-reporting to their tax authority.
To benefit from the effects of spontaneous tax reporting, and thus avoid paying a fine, three conditions must be met:
- No tax authority must be aware of the tax evasion
- The taxpayer must cooperate fully with the authority to determine the non-declared elements of fortune and income
- The taxpayer commits to paying the additional tax due
At the end of this procedure, taxpayers are liable for additional tax payments (tax due, calculated for the previous ten years) as well as default interest. Non-declared elements relating to income, fortune and inheritance are all concerned by this spontaneous declaration.
The heirs to a deceased taxpayer who did not declare all elements during his/her lifetime may choose to regularise this taxpayer’s assets, just as for other taxpayers. The difference is that the additional tax payments will only concern the three years prior to the death.
Spontaneous reporting: procedure
It is strongly recommended that a taxpayer inform his/her tax authority as soon as possible should he/she notice an oversight in the tax return (securities account, bank account, property assets abroad, income and earnings from abroad, etc.), before the administration notices the error themselves.
In order to do so, taxpayers in the canton of Geneva may fill out the form for spontaneous tax reporting available on the Geneva tax authority website, for example. Alternatively, you can contact a professional who will take care of the procedure for you.
Depending on the taxpayer’s situation, it may be necessary to submit a certain number of supporting documents along with the spontaneous declaration (bank statements, deed of purchase, tax statements, proof of income, etc.).
As each situation in unique, we recommend that you contact an expert who will help you to determine which elements to declare and assist you in the procedure.
Due to the automatic exchange of information, as of 2018, if the taxation authority discovers that you have failed to declare certain property or assets in your tax declaration, you will be liable for this additional tax and you may also have to settle a fine for tax evasion. The amount of this fine varies from 0.3 to 3 times the amount of tax due, depending on the extent of the evasion.
If you would like to review your assets and fortune in Switzerland and abroad in order to ensure that you are up to date with your taxes and perhaps submit a spontaneous declaration, accounting firm Bonnefous & Cie SA will be happy to examine your file and to advise you accordingly. Do not hesitate to schedule an appointment with one of our legal and tax advisors by calling +41 22 906 11 77, or by completing our online contact form.