The EU and Switzerland have signed a protocol updating tax cooperation, expanding automatic financial data exchange and introducing a framework for VAT recovery, effective from 2026.
The European Commission announced, on 20 October 2025, that it had signed an amending protocol to strengthen the existing tax cooperation agreement with Switzerland.
The release stated that the protocol brings the agreement in line with updated EU and international standards by broadening the automatic exchange of financial account information and introducing a new framework for cooperation on recovering value added tax (VAT) claims.
The amending protocol expands the automatic exchange of financial account information, in line with the updated Common Reporting Standard (CRS) agreed at international level. This update includes specific electronic money products and central bank digital currencies, ensuring that tax authorities have comprehensive access to relevant financial data.
Additionally, the protocol strengthens due diligence and reporting requirements, facilitating more effective use of information by tax administrations while limiting burdens on financial institutions.
The amending protocol also establishes a new framework for cooperation on the recovery of VAT claims and commits both parties to explore mutual assistance in recovering other tax claims, further enhancing tax cooperation. These amendments are a crucial development that will help prevent tax fraud and evasion and ensure a level playing field between the EU and Switzerland, given their significant economic ties.
The amendments concerning CRS updates with Switzerland are expected to be applied provisionally from 1 January 2026, while the new rules on tax recovery will take effect on 1 January of the year following the protocol’s entry into force.
