Swiss Supreme Court approves French request for disclosure

13 March 2017, the Swiss Supreme Court published its decision of 13 February permitting the Swiss Federal Tax Agency (SFTA) to comply with a French request for information about a UBS client’s bank account – despite the request for legal assistance probably being based on stolen bank client data.

In 2014, the SFTA approved a request for international tax assistance made by the French tax authorities in respect of a number of UBS clients who had banking relationships with UBS in Switzerland that had not been disclosed for French tax purposes.

One of the clients – a French national living in Switzerland – appealed against disclosure on grounds that the evidence was based on a list of 600 client names provided to the French tax authorities by a former marketing agent for UBS in France in 2010. Administrative requests based on improperly gathered evidence, it was argued, were invalid under the Swiss Administrative Tax Assistance Act of 2013.

In 2015, the Swiss Federal Administrative Court accepted the appellant’s arguments, ruling that the request infringed the principles of good faith implicit in the double taxation treaty between Switzerland and France. It ordered the SFTA not to comply with the French request. The SFTA appealed to the Swiss Supreme Court.

The Supreme Court stated that the France-Switzerland double tax treaty should be interpreted strictly and that there was no basis for refusing the international request for assistance. The bank data at issue had been “stolen” in France. It did not involve bank employees in Switzerland and the court therefore had to disregard the Swiss Administrative Tax Assistance Act.