Swiss expats living in New Zealand are hoping for a social security treaty between the two countries that would give them an increase in their local pensions.
Foreign retirement income is currently deducted from the local pension that a Swiss resident retiree receives. In 2016, New Zealand collected Swiss pension payouts worth more than NZ$1.8 million (US$1.26 million), a move that some consider to be plunder.
Now though, New Zealand is in the process of negotiating the automatic exchange of information (AIE) with Switzerland. This move will enable bank data such as account balances and interest earned to be transferred between the two countries.
According to Swiss Info, expat residents are seeing the situation as either an opportunity or threat, depending on their personal circumstances. AIE is likely to reveal whether individuals have been hiding Swiss pension money in Swiss bank accounts. If this money is identified, it could be liable for large additional payments as well as penalties for tax evasion.
Swiss residents who have not been hiding money offshore, on the other hand, have been calling on the Swiss parliament and federal government to use AIE as a bargaining chip in persuading New Zealand to negotiate a social insurance treaty as a prerequisite to AIE.
Switzerland’s House of Representatives has now been tasked with the job of undertaking these negotiations, but convincing the Swiss Senate to create a special deal for New Zealand is proving more difficult. On 5 December 2017, the Senate passed AIE for New Zealand without any such deal being done, sending the issue back to the House for further discussion in the process.
The European Union and many other European countries have already tried and failed to persuade New Zealand to change its practices. But linking AIE to the drafting of a social insurance treaty could, warns Kati Fréchelin, a lawyer with the Swiss Federal Social Insurance Office, result in New Zealand failing to sign any AIE agreement at all.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
Swiss expats living in New Zealand are hoping for a social security treaty between the two countries that would give them an increase in their local pensions.
Foreign retirement income is currently deducted from the local pension that a Swiss resident retiree receives. In 2016, New Zealand collected Swiss pension payouts worth more than NZ$1.8 million (US$1.26 million), a move that some consider to be plunder.
Now though, New Zealand is in the process of negotiating the automatic exchange of information (AIE) with Switzerland. This move will enable bank data such as account balances and interest earned to be transferred between the two countries.
According to Swiss Info, expat residents are seeing the situation as either an opportunity or threat, depending on their personal circumstances. AIE is likely to reveal whether individuals have been hiding Swiss pension money in Swiss bank accounts. If this money is identified, it could be liable for large additional payments as well as penalties for tax evasion.
Swiss residents who have not been hiding money offshore, on the other hand, have been calling on the Swiss parliament and federal government to use AIE as a bargaining chip in persuading New Zealand to negotiate a social insurance treaty as a prerequisite to AIE.
Switzerland’s House of Representatives has now been tasked with the job of undertaking these negotiations, but convincing the Swiss Senate to create a special deal for New Zealand is proving more difficult. On 5 December 2017, the Senate passed AIE for New Zealand without any such deal being done, sending the issue back to the House for further discussion in the process.
The European Union and many other European countries have already tried and failed to persuade New Zealand to change its practices. But linking AIE to the drafting of a social insurance treaty could, warns Kati Fréchelin, a lawyer with the Swiss Federal Social Insurance Office, result in New Zealand failing to sign any AIE agreement at all.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
