The governments of Indonesia and Switzerland have signed the Automatic Exchange of Information (AEOI) pact, under which the two countries will be mandated to share non-resident financial account data with the tax authorities in the account holders’ country of residence.
The two parties will share financial account information automatically as per OECD’s Common Reporting Standard (CRS), which will be effective from 2018. Exchange of financial data is scheduled to commence in 2019.
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Indonesia finance minister Mulyani Indrawati said that the deal was important considering Switzerland’s status as one of the largest financial centres worldwide.
“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,” stated.
The latest agreement comes following a regulation passed by the Indonesian government in May 2017 that offers the country’s tax authorities access to information held in financial accounts for automatic exchange of information in tax matters.
