September 30, 2013 by Ellen Wallace
BERN, SWITZERLAND – The urgency for Switzerland to sign an agreement to work with the US Fatca law may have been exaggerated, with Bern announcing 30 September that Swiss banks have six months of grace to implement it.
Fatca is scheduled to go into effect in January 2014 but for the umpteenth time the complex Foreign Account Tax Compliance Act start date has been pushed back.
Entry into force of FATCA agreement between Switzerland and United States delayed by six months
Bern, 30.09.2013 – Switzerland and the United States have amended the FATCA agreement in line with the new timetable for FATCA implementation by means of an exchange of notes. Swiss financial institutions now have to implement FATCA from 1 July 2014 rather than from 1 January 2014.
On 12 July 2013, the US Department of the Treasury announced that FATCA implementation by foreign financial institutions would be postponed by six months. As the FATCA agreement signed between Switzerland and the United States on 14 February 2013 was based on the earlier timetable with commencement on 1 January 2014, it had to be adjusted to the new schedule.
This amendment lies within the authority of the Federal Council and assures Swiss financial institutions the same implementation deadlines as financial institutions in other countries. The agreement was amended by means of an exchange of notes. The amendment will enter into force at the same time as the FATCA agreement.
The agreement was approved and the implementing act adopted in the final vote of parliament on 27 September 2013. The changes necessitated by the postponement are taken into account in the federal decree and in the act. The FATCA agreement and the implementing act are subject to an optional referendum.
It is no secret that the “urgency” has been exaggerated. It is common knowledge that Switzerland has been threatened into signing up to FATCA so that other nations would be more easily scared too.