Automatic Information Exchange

Boundless Transparency

The Automatic Information Exchange (AIA) is a new global regulation aimed at increasing tax transparency. With the amendment of the German Interest Information Regulation, bank secrecy for numerous foreign accounts has effectively ended.

Initially, exceptions were accounts in Austria, Switzerland, Liechtenstein, Monaco, Andorra, and San Marino. However, bank secrecy in these countries ended on January 1, 2017. In the future, not only interest but also all capital gains and balances on foreign accounts will be transparent to German tax authorities. Since the reports to the German tax authorities for the fiscal year 2017 will be transmitted for the first time at the beginning of 2018, there remains a small window of opportunity for proactive re-declaration through a penalty-free voluntary disclosure.

Taxpayers who have not yet declared income from bank accounts in the aforementioned or other “third countries” should promptly take advantage of the opportunity for penalty-free voluntary disclosure. The same applies to taxpayers who have not earned income from foreign bank accounts but have made significant deposits into foreign accounts from previously undeclared income sources.