Groundbreaking Swiss Supreme Court Decision On tax Administrativeassistance—The End Of ‘Foreseeablerelevance'?

Author:Ms Alisa Burkhard and Luzius Cavelti
Profession:Altenburger Ltd legal + tax

On July 26, 2019, the Swiss Federal Supreme Court rendered a groundbreaking judgment in the field of administrative assistance in tax matters. Reversing a 2018 ruling of the Swiss Federal Administrative Court, the Supreme Court decided that information regarding tens of thousands of UBS account holders presumed to have tax residence in France could be transmitted to the French tax authorities.

The decision was rendered by a panel of five judges, who held public deliberations—a rare occurrence at the Supreme Court that only takes place when the panel's opinions are divided—before approving the exchange of information by a narrow vote of 3-2.

The judgment may well turn out to be a turning point in tax administrative assistance practice in Switzerland. Even before the Supreme Court's written reasoning becomes available, the decision has already given rise to concerns among the banking community that foreign tax authorities will be able to submit broad requests to the Swiss Federal Tax Administration (FTA) without having to demonstrate concrete indications of alleged tax transgressions by account holders at Swiss banks.

Indeed, the judgment risks to undermine the concept of ''foreseeable relevance'' and the prohibition of fishing expeditions in tax administrative assistance. In addition, with the new decision, the distinction between individual requests and group requests has become even blurrier. The decision also raises the question of how individual and group requests will be distinguished from pure fishing expeditions in the future.


In May 2016, the French tax authorities sent an administrative assistance request to the FTA. The request was based on lists of bank-internal identification numbers that had been confiscated at German UBS branches in 2012-2013 and later passed on to the French authorities. The lists contained around 40,000 account and bank-internal numbers relating to account holders at UBS presumed to have tax residence in France. The French request thus aimed at obtaining identifying information—including names, addresses and account balances, about these account holders.

The FTA agreed to transfer the requested information to the French tax authorities in February 2018, but UBS and various account holders filed an appeal against the FTA's decision to the Administrative Court, which decided in favor of the appellants. The FTA then appealed the Administrative Court's decision before the Supreme Court.

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