Administrative Assistance in Tax Matters between Switzerland and France

Facts

French nationals, the X. spouses, had been residing in Geneva since March 2010 where they were first taxed on the basis of expenditure, and then on an ordinary basis from 2013. On July 26, 2013, the French authorities sent the Federal Tax Administration (FTA) a request for administrative assistance regarding the tax situation in Switzerland of the X. spouses during the tax periods 2010 to 2012. On December 18, 2013, the French authorities filed a second request covering the years 2010 to 2013, indicating that the X. spouses were the subject of a tax audit in France and that there were elements to consider that they were domiciled in France, where their household was located, where they mainly resided and where they carried out their professional activities. The French authorities thus requested information concerning the bank accounts held by the X. spouses in Switzerland with bank Y.

Considerations

The Federal Court ruled that the judgment of the Federal Administrative Court, which considered that the request for assistance was not sufficiently relevant, was not in accordance with the principles governing administrative assistance in tax matters. Indeed, the French request met the formal and substantive requirements imposed by the Double Taxation Convention (DTC) between Switzerland and France, and none of the restrictions provided for by Swiss law justified a refusal to enter into the matter. The requested State (Switzerland) cannot call into question the allegations of the requesting State (France) in the absence of concrete elements calling its good faith into question.

Furthermore, the Court considered that Article 28, paragraph 5, second sentence, of the Switzerland-France DTC is a directly applicable…