What is the purpose of the transparency register?
The primary aim of this reform is to combat money laundering and terrorist financing, as well as to align Switzerland with international standards. Legal persons will be required to identify their beneficial owners, report the relevant information and keep it up to date on an ongoing basis. The register will not be publicly accessible, but it will be available in particular to authorities – including the tax authorities – and to financial intermediaries.
Why is this relevant from a tax perspective?
The transparency register will significantly improve the information available to the tax authorities. Shareholding and control structures will become more transparent, making it possible to systematically compare register data with tax returns. Discrepancies between the information reported in the register and the circumstances declared for tax purposes may therefore lead more frequently to enquiries or more in-depth reviews. Even if the register does not carry formal evidential value, it may in practice create increased pressure on taxpayers to explain and justify their tax position.
Where can a concrete need for subsequent declaration arise?
This is particularly relevant wherever assets, shareholdings or beneficial ownership positions have not previously been disclosed, or have been disclosed only incompletely. Particular risks arise in the case of complex shareholding structures, international matters (e.g. offshore companies), as well as fiduciary and trust structures, where their declaration has so far been insufficient. As the transparency register requires the disclosure of beneficial ownership, previously hidden arrangements may come to light and trigger tax corrections.
Will a voluntary disclosure without penalty still be possible?
In principle, the possibility of a voluntary disclosure without penalty remains available. However, it will need to be assessed whether a declaration submitted after the introduction of the register can still be regarded as “voluntary”. In any event, the risk increases that previously undiscovered tax evasion will be uncovered before a proactive subsequent declaration is made.
Assessment of the opportunities and risks of the transparency register
The introduction of the transparency register is likely to strengthen tax fairness and facilitate the fight against tax evasion. At the same time, increased compliance efforts and additional uncertainties are to be expected – particularly in the case of complex structures. It also cannot be ruled out that, in practice, the register will function as an additional tax control instrument.
Conclusion and need for action
Author
Pamela Amrein
Tax
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Baar
