Indonesia, Swiss to exchange information on finance
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The governments of Indonesia and Switzerland have declared the readiness of both countries to implement the Automatic Exchange of Information (AEOI).
The signing of the joint declaration was undertaken by Director General of Taxes, Ken Dwijugiasteadi, and Swiss Ambassador to Indonesia, Yvonne Baumann, witnessed by the Minister of Finance of the Republic of Indonesia and Members of the Board of Commissioners of the Financial Services Authority here on Tuesday.
Finance Minister Sri Mulyani stated that it was important for Indonesia to be able to implement AEOI with Switzerland as it was one of the largest financial centers in the world.
“Financial information obtained from Switzerland and nearly 100 other countries will be used as a tax database to test the compliance rate of taxpayers. It is expected to encourage their awareness to fulfill tax obligations voluntary, especially in reporting their earnings and financial assets abroad which have not been reported,” Sri Mulyani explained.
Through the joint declaration, Indonesia and Switzerland agreed to exchange financial account information automatically in accordance with the Common Reporting Standard (CRS) starting from 2018, with the first exchange in 2019, protected by data security assurance according to international standards.
Both jurisdictions also stated that they will share information on the development of CRS implementation in each countrys domestic legislation and affirm the commitment to continue strengthening cooperation in the financial sector.
The joint declaration is required by Switzerland to enable the Multilateral Competent Authority Agreement (MCAA) to implement AEOl to obtain the Swiss Parliament approval by the end of 2017.
On May 8, 2017, the Indonesian Government adopted a Government Regulation In lieu of Law No. 1/ 2017 on Access to Financial Information for Tax Interests.
It regulates the authority of the Directorate General of Taxation to receive and obtain financial information from financial institutions throughout Indonesia and the authority of the Minister of Finance to execute financial information exchange with authorities for other countries or jurisdictions.
Questions & Answers
Q.When will the first exchange of financial information between Indonesia and Switzerland take place?
When will the first exchange of financial information between Indonesia and Switzerland take place?
Indonesia and Switzerland have agreed to exchange financial account information automatically starting from 2018. The first exchange of this information is scheduled to occur in 2019.
Q.What is the primary purpose of Indonesia receiving financial information from Switzerland and other countries?
What is the primary purpose of Indonesia receiving financial information from Switzerland and other countries?
The financial information received will be used to create a tax database. This database aims to test taxpayers' compliance rates and encourage them to voluntarily fulfill tax obligations, especially for earnings and assets abroad.
Q.What assurance has been provided regarding the exchanged financial data?
What assurance has been provided regarding the exchanged financial data?
The agreement states that the exchanged financial account information will be protected by data security assurance. This protection will be implemented according to established international standards.
Q.What was required for Switzerland to implement the Automatic Exchange of Information (AEOI)?
What was required for Switzerland to implement the Automatic Exchange of Information (AEOI)?
Switzerland required the joint declaration to enable the Multilateral Competent Authority Agreement (MCAA) for AEOI implementation. This process needed to obtain the Swiss Parliament's approval by the end of 2017.
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