December, 2016

Israel and Switzerland signed the Agreement of Automatic Transfer of Financial and Banking Information between the Two Countries.

A declaration of intent for mutual cooperation was signed on November 27, 2016 between Israel and Switzerland. This agreement intends to increase the cooperation between the two countries for automatic exchange of financial information, which will assist in the enforcement of payment of Israeli tax and the combat against money laundering. This agreement is part of the increasing efforts of the ITA to expose unreported worldwide income of Israeli tax residents under the Common Reporting Standard.

The Israeli Tax Authority (ITA) stated that: "the strengthening of cooperation between the two countries will increase the financial information that will become available to the ITA regarding assets held by Israeli residents at Swiss financial institutions. This information will contribute to the enforcement of tax payments in Israel, and the reduction of money laundering".

The Common Reporting Standard, otherwise known as the CRS, is the global standard for automatic exchange of financial information as developed and initiated by the OECD. Israel declared on October 27th, 2014, its intention to join the CRS by the end of 2018, as part of Israel’s commitment to meet international standards regarding tax enforcement. Once the CRS is implemented, Israeli financial institutions will have to identify and file information concerning non-Israeli resident account holders, which includes balances, deposits and income received in bank accounts. The Knesset approved recently the necessary legal framework of exchange of information between jurisdictions that Israel has a tax treaty with or agreement for such an exchange, and Israel signed on the Multilateral Competent Authority Agreement on November 25, 2015.  The transfer of information will begin in September 2019 and include financial information from 2018.

More than a hundred jurisdictions have already agreed on implementing this global standard for the automatic exchange of information between tax authorities. Included among these are many countries which have citizens living in Israel such as the U.S., the UK, Switzerland, Belgium, Canada, Chile, Mexico, Argentina, South Africa and France. As a result of this agreement, banking information will now flow from and to these countries.