The Automatic Exchange of Information (AEOI) is an international standard aimed at preventing tax evasion. An extension of the AEOI includes crypto assets, which the Federal Council intends to implement by January 2026.
In October 2022, the Organization for Economic Cooperation and Development (OECD) published updates to the Common Reporting Standard (CRS) and the new Crypto-Asset Reporting Framework (CARF), according to a statement from the Federal Council. The accompanying recommendation from the OECD Council of Ministers states that both frameworks are binding AEOI standards that must be implemented globally. Including Switzerland.
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Automatic exchange of information on crypto assets
Under the Swiss AEOI law, which entered into force on January 1st 2017, all Swiss financial institutions must identify clients who are tax residents of another participating country. If such an individual is identified, the financial institution reports the relevant information to the Swiss Federal Tax Administration (FTA) on an annual basis. The FTA then forwards the data to the competent tax authorities of the respective AEOI partner country.
This is the first update to the framework since its adoption by the OECD in 2014. Switzerland has committed to implement this standard and to adopt further amendments. While the CRS update clarifies issues of interpretation and takes into account practical experience, the CARF regulates the treatment of cryptoassets and their providers. So-called "crypto-assets" are defined as digital assets based on a distributed ledger or similar technology.
Implementation by 2026
Subject to parliamentary approval, the Federal Council also intends to implement the AEOI Crypto-Asset Reporting Framework (CARF). This is intended to close gaps in the tax transparency framework and ensure equal treatment with traditional assets and financial institutions, according to the statement. The implementation of the CARF extends Switzerland's progressive crypto regulation and contributes to maintaining the credibility and reputation of the Swiss financial center.
The Federal Council's consultation process will run until September 6, 2024. After that, the proposal will be submitted to the Swiss Parliament. The amendment should be finalized and enter into force by January 2026.
