After 4 years of proceedings, the Swiss tax authorities are to send their French counterparts the identities of UBS clients, most of whom are suspected of tax fraud. The Swiss authorities have nevertheless given taxpayers 30 days to contest the decision, which was taken on May 12.
A request for administrative assistance made in 2016
In accordance with a decision taken on May 12, 2020, Switzerland will transmit to the French tax authorities the full names, dates of birth and addresses of the holders of 40,000 accounts with UBS. This was not a foregone conclusion for France.
An administrative request for mutual assistance had been made by the Direction générale des Finances publiques (DGFIP) in 2016. This request was not expected to cause any problems, as Switzerland complies with the rules set out by the Organization for Economic Cooperation and Development (OECD) and regularly collaborates with the tax administrations of foreign countries. However, in July 2019, the Federal Administrative Court rejected Bercy's request for "non-compliance with the conditions of admissibility". According to the court, the French administration had failed to specify the reasons that suggested that the taxpayers had not complied with their tax obligations. In July 2019, after a lengthy diplomatic tug-of-war, the Swiss Federal Tax Administration (AFC) finally agreed to accept the French request.
Audits and possible tax adjustments
Once the information has been received, the French authorities will set about exploiting it and verifying the identity of the taxpayers by looking for elements corroborating the holding of the accounts. The taxpayers concerned risk heavy tax and criminal penalties: 7 years' imprisonment and a €3 million fine. It is in their interest to be proactive and to quickly regularize their situation.
The Cour des Comptes, commissioned in 2019 by the Prime Minister, has been unable to provide an overall assessment of the amount of tax evasion in France. However, the Solidaires finances publiques union puts the figure at €80 billion a year.
France has recently announced a series of measures to combat this scourge. The anti-fraud law passed in 2018, for example, extended the "guilty plea" mechanism to the tax field and set up a "tax police" tasked with limiting abuses. The "Bercy lock" giving the tax authorities a monopoly on prosecution in cases of fraud has also been relaxed. From now on, the tax authorities will be obliged to refer cases of fraud exceeding 100,000 euros to the courts. Finally, the government has tightened controls on fraud committed by companies selling products on online platforms. From 2021, these companies will be liable for VAT on a proportion of their transactions.