STEP

Title Research

Switzerland

In the 13th century, the cantons of Uri, Schwyz and Unterwalden concluded the Federal Charter of 1291 and founded the first Swiss Confederation. It achieved full self-governance in 1499. More cantons joined this federation over time. In 1848, this federation of autonomous cantons was replaced by a proper constitutional democracy with a federal structure and an independent judiciary. The Federal Constitution was amended in 1874 and 2000. It guarantees the basic rights of the people and participation of the public and allocates functions between the Confederation and the cantons, defining responsibilities of the various levels of authorities.

STEP Switzerland and Liechtenstein website
STEP Switzerland and Liechtenstein branch pages

New developments
  • 1 July 2007: Switzerland became party to Hague Convention on the Law Applicable to Trusts and on their Recognition, 1 July 1985 (Convention), with corresponding Swiss legislation needed for implementation.
  • 5 July 2007: Swiss Association of Trust Companies (SATC) was formed with support of STEP.
  • 22 August 2007: The Swiss Conference of Taxation published Circular letter nr. 30, which sets out guidelines on the taxation of trusts and trustees with connections to Switzerland.
  • 27 March 2008: The Swiss Federal Tax Administration published Circular letter nr. 20 confirming the content of Circular letter nr. 30.
  • 8 February 2009: adoption of initiative providing for the abolition of the lump-sum tax regime for the Canton of Zurich, comes into force on 1 January 2010
  • 13 March 2009: Federal Council announces that Switzerland intends to adopt the OECD standard on administrative assistance in tax matters in accordance with Article 26 of the OECD Model Tax Convention

1. Introduction

a. History and background

In the 13th century, the cantons of Uri, Schwyz and Unterwalden concluded the Federal Charter of 1291 and founded the first Swiss Confederation. It achieved full self-governance in 1499. More cantons joined this federation over time. In 1848, this federation of autonomous cantons was replaced by a proper constitutional democracy with a federal structure and an independent judiciary. The Federal Constitution was amended in 1874 and 2000. It guarantees the basic rights of the people and participation of the public and allocates functions between the Confederation and the cantons, defining responsibilities of the various levels of authorities.

Switzerland is not a member state of the European Union (EU). Nonetheless, in 1999, bilateral agreements between Switzerland and the EU were signed. They came into force in 2002.

The capital city is Bern. Total Swiss population is approximately 7.5 million. Official languages are German, French, Italian and Romanch. English is widely spoken, especially in the financial services industry. Switzerland’s land area is 41,285 square kilometres.

The currency is the Swiss franc (CHF).

b. Legal system

Switzerland has a civil law system. Statutes are the most important sources of law, the Federal Constitution being the cornerstone. The Federal Constitution leaves all law-making power to the cantons, unless expressed otherwise.

All legislative acts are subject to judicial review. The civil, criminal and administrative courts at the trial level and the intermediate appellate level fall into the cantonal jurisdiction. The highest court is the Federal Supreme Court, the court of last resort on Federal constitutional matters.

c. Resources

Executive Authority/Swiss Confederation Authorities www.admin.ch

Legislative Authority www.parlament.ch

Judicial Authority www.bger.ch

European Union agreements www.europa.admin.ch/themen/00500/00506/index.html?lang=en

General information www.bfs.admin.ch

Swiss Association of Trust Companies www.satc.ch

Editorial board
Nicole Hausmann TEP
HSBC Private Bank, Zurich, Switzerland
Stephanie Jarrett TEP
Baker & McKenzie, Geneva, Switzerland

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