Extension of International Automatic Exchange of Information in Tax Matters (CRS 2.0)

In 2022, the OECD published the updated Standard for Automatic Exchange of Financial Account Information in Tax Matters, also referred to as the Common Reporting Standard (CRS). The updated includes two key elements:

Amendment of the existing standard for the automatic exchange of financial account information (so-called CRS 2.0).
Introduction of the new Crypto-Asset Reporting Framework (CARF).

On February 19, 2025, the Swiss Federal Council submitted to Parliament the dispatch to implement these elements. The corresponding legislation is planned to enter into force on January 1, 2026.

The summary below includes the most significant changes for Swiss Reporting FIs enacted under the revised Common Reporting Standard (CRS 2.0), but many updates also concern our non-Swiss readers.

We will provide a detailed overview of the CARF requirements in our next newsletters.

Key Updates Introduced by CRS 2.0

The overview below is based both on the current version of the standard and on the draft Swiss legislation and may be subject to change, once the new AEOI Guideline by Swiss Federal Tax Administration (SFTA) is published:

1. Expansion of In-Scope Products

Introduction of the terms Specified Electronic Money Products and Central Bank Digital Currencies (CBDCs) and broadening the definition of terms Depository Account and Depository Institution to include these products. However, Depository Accounts that represent all Specified Electronic Money Accounts held for the benefit of a customer are treated as CRS-exempt accounts, if the rolling average 90 day end-of-day aggregate account balance or value during any period of 90 consecutive days did not exceed USD 10’000 at any day during the calendar year or other appropriate reporting period.
Expanding the definition of Financial Asset to include any interest in a Relevant Crypto-Asset. This means that any product representing an interest in a crypto-asset will fall within the scope of the CRS, except where the asset is a central bank digital currency, a specified electronic money product, or a crypto-asset for which the reporting crypto-asset service provider has determined that it cannot be used for payment or investment purposes. In practice, this applies to, for example, derivatives that reference Relevant Crypto-Assets and are held in Custodial Accounts.

2. Defining Time Limits for Exempt Capital Contribution Accounts

CRS 2.0 clarifies the conditions under which capital contribution accounts are treated as CRS-exempt accounts. Under the revised rules, a capital contribution account will qualify as exempt if it has been established no more than 12 months prior.

3. Repealing the Special Nonreporting FI statuses for Swiss foundations and associations

The special Nonreporting FI status previously available to certain Swiss tax-exempt foundations and associations will be repealed and replaced with a new status: “Nonreporting FI – Qualified Non-Profit Entity.”

4. Strengthening Due Diligence and AML/KYC Requirements

Under CRS 2.0, reliance on tie-breaker rules will no longer be permitted. While cases of double residence are currently resolved through tax treaty provisions granting preference to one jurisdiction over another, this approach will no longer apply. Going forward, in situations of dual or multiple residency, all jurisdictions of residence must be declared in the individual account holder’s self-certification, and the Reporting FI must treat the account as a Reportable Account for each Reportable Jurisdiction.
When validating a self-certification, financial institutions must consider the OECD guidance on Citizenship by Investment and Residence by Investment schemes (CBI/RBI schemes). Certain CBI/RBI schemes are considered potentially high-risk, as they may be misused to circumvent CRS reporting. These are typically schemes that provide access to low personal income tax rates on offshore financial assets without requiring significant physical presence in the jurisdiction. The OECD publishes information on such potentially high-risk schemes, and Reporting Financial Institutions are expected to rely on this information when assessing the reliability of a self-certification.

Where doubts arise regarding the tax residency of an Account Holder or Controlling Person claiming residence in a jurisdiction offering a high-risk CBI/RBI scheme, the self-certification should not be accepted until additional plausibility checks have been performed. The OECD notes that such plausibility checks may include questions on whether the individual:
- has obtained residence rights under a CBI/RBI scheme;
- holds residence rights in other jurisdictions;
- has spent more than 90 days in any other jurisdiction during the previous year; and
- has filed personal income tax returns in other jurisdictions during the previous year.

5. Enhancing Requirements for Obtaining the TIN

Where a taxpayer identification number (TIN) is missing, financial institutions must make ongoing reasonable efforts to obtain it – not only during the first two years after an account becomes reportable, but also whenever AML obligations require account information updates.

6. Expanding the Scope of the Reportable Information

The following data points, which were not previously mandatory, will now be reportable:
- Whether the account is pre-existing or new account.
- Whether a valid self-certification is on file.
- Whether the account is a joint account; in such cases, the number of account holders must also be reported.
- The type of account, classified as one of the following: depository account; custodial account; cash value insurance contract or annuity contract; or equity or debt interest.

7. Reporting the Roles of Controlling Persons and Equity Interest Holders in Entities, Trusts, and Trust-Similar Arrangements

For entities, trusts, and trust-like arrangements (e.g., foundations) that qualify as Passive NFEs, the role of each controlling person must be reported by the reporting Swiss financial institution holding the financial account.
For entities, trusts, and trust-like arrangements that are professionally managed investment entities whose equity interest holders are reportable persons, the role of each reportable equity interest holder in the entity, trust, or trust-like arrangement must be reported. Previously, these fields were optional.

Next Steps and Preparations

The first reporting under the new CRS 2.0 guidelines will be due in 2027. Nevertheless, Swiss Reporting FIs should prioritize certain aspects of the implementation as early as possible to ensure that systems and processes are updated by January 1, 2026, to capture the required information. We recommend that FIs coordinate with their system providers to confirm that all newly required fields are available for CRS-relevant entries.

In addition, internal policies, procedures, and client forms should be reviewed and updated to remove discontinued statuses, eliminate outdated regulatory references, and reflect updated definitions. Furthermore, new regulatory requirements - particularly those outlined in the section “Strengthening Due Diligence and AML-KYC Requirements” - must be incorporated.

However, as the official SFTA AEOI Guideline (AIA-Wegleitung) has not yet been published, certain Swiss-specific implementation details (“Swiss Finish”) remain unclear. A staged approach to implementation will therefore be necessary. Once the new AEOI Guideline is issued, a more detailed gap analysis of internal policies, procedures, and processes may be required. Finally, FIs should strongly consider testing the updated reporting specifications to ensure that reports can be filed correctly and without disruption in 2027.