Switzerland and the USA have signed a Foreign Account Tax Compliance Act (FATCA) agreement in Bern. It is expected that the agreement will help Swiss financial institutions in the implementation of the US tax legislation.
Initialed on December 03, 2012, the Swiss-US agreement provides for simplifications in implementing FATCA. The agreement has to be submitted to the Swiss parliament for approval and is subject to an optional referendum in Switzerland.
The FATCA agreement signed with Switzerland allows Swiss financial institutions to exchange information with the US tax authority. The Final Regulations published by the US Treasury and the tax authority on January 17, 2013, are applicable to Swiss financial institutions to the extent that the agreement and its annexes do not expressly make provision for derogations from the rules.
The agreement signed provides for simplifications for following sections of the Swiss financial industry:
The agreement ensures that accounts owned by US persons in Swiss financial institutions are disclosed to the US tax authority either with the consent of the account holder or by means of group requests within the scope of administrative assistance. Information will not be transferred automatically in the absence of consent, and instead will be exchanged only on the basis of the administrative assistance clause in the double taxation agreement.
Swiss financial institutions will be forced to implement FATCA from January 01, 2014, irrespective of the relevant agreement between Switzerland and the US.
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