Switzerland has been participating in the automatic exchange of information in tax matters (AEOI) since 1 January 2017.
As the issuer of credit and PrePaid cards, Viseca Card Services SA (hereinafter “Viseca”) is also subject to the AEOI. To comply with legal requirements, Viseca is introducing new credit balance restrictions on credit and PrePaid cards, which are valid for domestic and foreign clients of Viseca.
We would like to take this opportunity to provide you with detailed information on the minor effects of the AEOI on your business relationship(s) with Viseca.
What is the automatic exchange of information (AEOI)?
The AEOI is an international standard for tax matters that governs how the tax authorities of the participating countries exchange data on the financial accounts (bank accounts, securities deposits, etc.) of foreign taxpayers. In addition to Switzerland, more than 100 countries, including all major financial centres, have adopted this standard to date. The aim is to create transparency and make tax evasion impossible.
Switzerland has been participating in the AEOI since 1 January 2017. It obliges Swiss financial institutions to report information on account holders who are liable to tax abroad and their accounts to the Federal Tax Administration. The Federal Tax Administration then exchanges the information with the foreign tax authorities.
Is Viseca also required to report information about its clients (cardholders) to the tax authorities?
No, Viseca is not required to report any information on its clients (cardholders) to the Federal Tax Administration.
The card accounts maintained by Viseca for credit and PrePaid cards are regarded as so-called “excepted accounts” (Art. 16 OAEOI, Art. 4 (3) OAEOI).
However, this exception pre-supposes that Viseca has monitored and limited the amount of credit balances (deposits) on all credit and PrePaid cards as of 1 January 2017.
What credit balance restrictions now apply to me as a holder of a credit or PrePaid card?
Since 1 January 2017, Viseca has ensured that PrePaid credit card holders reduced their excessive credit within 60 days.The following credit regulations apply accordingly (also for the cards of clients liable to tax in Switzerland).
PrePaid cards
Credit balances exceeding CHF/EUR/USD 10,000 (threshold): These credit balances must be reduced to a maximum of CHF/EUR/USD 10,000 within 60 days. If a client has several PrePaid cards, the credit balances of all PrePaid cards are summed (accumulated).
Credit cards
Credit balances exceeding USD 40,000 (threshold, converted into the respective card currency by Viseca): These credit balances must be reduced to a maximum of USD 35,000 within 60 days. If a client has several cards (credit cards, credit and PrePaid cards), the credit balances of all cards are summed (accumulated).
Will I be informed by Viseca if the credit balance of my credit or PrePaid card is too high?
Yes, Viseca will notify you in writing or by phone.
If VISECA identifies an excessively high credit balance, you will be contacted and asked to reduce the credit balance within a specific period to a maximum of CHF/EUR/USD 10,000 for PrePaid cards or USD 35,000 for credit cards.
The credit balance can be reduced through ordinary card use by you as the cardholder or via the return (transfer) of the funds to a bank or postal account held in your name in Switzerland or in the Principality of Liechtenstein (for bank clients in the Principality of Liechtenstein).
May I charge more than CHF/EUR/USD 10,000 on my PrePaid card?
No.
According to Section 9.1 of Viseca’s GTC, the balance (the credit balance) on your PrePaid card may not exceed the maximum expenditure limit.
Depending on the product, Viseca Prepaid cards have a maximum monthly expenditure limit of CHF/EUR/USD 10,000.