Update of automatic exchange of tax information agreement
Switzerland and the European Union are set to deepen their cooperation in tax matters through an updated agreement that enhances the automatic exchange of information (AEOI) and introduces new provisions for mutual assistance in VAT recovery.
The existing agreement on the AEOI, in force since 2017, implements the OECD global standard and helps combat cross-border tax evasion by facilitating information exchange between Switzerland and all EU member states. However, with evolving international tax standards, an update has become necessary.
On 10 July 2025, the European Commission published a proposal seeking authorisation from the European Council to sign an Amending Protocol with Switzerland. This proposal was also published in the EU Official Journal. Member states are expected to give their approval by autumn 2025, allowing the updated agreement to provisionally enter into force in 2026.
New Framework for VAT Recovery Assistance
In addition to adapting the CRS provisions, the updated agreement introduces a legislative framework for mutual assistance in recovering VAT claims, building on the model of the EU-Norway agreement and the EU Recovery Directive.
While closely following the EU-Norway approach, the draft EU-Switzerland agreement includes some notable differences:
-
Thresholds for assistance: The minimum amount to trigger recovery assistance is set higher. Under the Norway agreement, assistance is not mandatory for claims below €1,500. In the Swiss deal, this is set at €10,000, potentially lowered to €5,000 if over a five-year average no state receives more than 200 requests annually. If requests rise above 250, the threshold reverts to €10,000.
-
Cost provisions: Unlike the Norway deal where states waive reimbursement claims, the Swiss agreement allows the assisting country to retain 5% of the recovered sum, subject to a €500 minimum and a €5,000 cap.
-
Recovery sequencing: Before requesting assistance, the applicant state must first seek recovery from jurisdictions where there is a clear indication of available assets and where such efforts would likely fully satisfy the claim—adding an extra step not found in the Norway arrangement.
Updates Driven by Crypto and New Tax Transparency Standards
The main driver of these changes is the need to adapt the current framework to recent updates to the OECD Common Reporting Standard (CRS), especially those stemming from the Crypto-Asset Reporting Framework (CARF) and the EU’s own Directive on Administrative Cooperation (DAC8).
Starting 1 January 1 2026, the CRS will be expanded to cover:
-
Crypto-assets, including indirect investments through derivatives and investment vehicles,
-
Certain electronic money products and central bank digital currencies,
-
Tax rulings granted for high net worth individuals,
-
And non-custodial dividends and similar income.
The amended agreement with Switzerland ensures that the automatic exchange of financial account information continues seamlessly under the updated CRS, keeping the EU-Swiss arrangements aligned with EU law, particularly DAC8.
Outlook
The Commission emphasized that this enhanced cooperation with Switzerland not only preserves but modernizes the tax transparency regime, adapting it to new realities such as crypto-assets. It also strengthens mutual VAT recovery capabilities, aligning with evolving EU standards and supporting the fight against tax evasion and fraud across borders.
The updated agreement underscores the continued partnership between the EU and Switzerland in maintaining robust tax cooperation frameworks that keep pace with global and technological developments.
