FATCA and Switzerland

205 thoughts on “FATCA and Switzerland”

1. http://www.currentconcerns.ch/index.php?id=2594
   “Current Concerns > 2013 > No 39, 27 December 2013 > FATCA: “The real victims will be national sovereignty and citizens’ and consumers’ rights” [printversion]
   FATCA: “The real victims will be national sovereignty and citizens’ and consumers’ rights”
   Interview with James George Jatras*, J.D., Washington D.C.”

   Recent interview with James Jatras. Specifically references Switzerland and Canada.

   Note useful arguments and references.

2. http://profwilliambyrnes.com/2014/02/26/senate-subcommittee-hearing-and-report-on-offshore-tax-evasion/?relatedposts_exclude=2671

   ‘Senate Subcommittee Hearing and Report on Offshore Tax Evasion: Credit Suisse Investigation’
   Posted by William Byrnes on February 26, 2014

3. http://blogs.angloinfo.com/us-tax/2014/03/24/swiss-account-holders-now-losing-the-right-to-be-informed-about-disclosures-to-irs/

   ‘Swiss Account Holders – Losing the Right to be Informed About IRS Disclosure’
   March 24, 2014

4. Wow. Pretty heavy stuff.

5. Discussion group in Switzerland: Threads in Forum : Finance/banking/taxation

   http://www.englishforum.ch/commercial-events/203670-fatca-problem-solving-info-session.html

   http://www.englishforum.ch/finance-banking-taxation/169536-giving-up-blue-passport-because-fatca-one-member-s-experience-16.html

6. “……de Watteville says the Swiss government wants a new Fatca (Foreign Account Tax Compliance) agreement . The current one goes into effect 1 July 2014. It calls for Swiss banks to send directly to US authorities data on their US clients. The option selected by some other countries now interests Switzerland: the federal government would be responsible for sharing the data with the US, rather than banks, and the US would reciprocate .”

   http://genevalunch.com/2014/04/14/us-swiss-bank-tax-agreement-rumoured-soon/

7. counter reform:
   http://www.vollgeld-initiative.ch/english/

8. In the event that Brockers haven’t read today’s Liechtenstein “Vaterland” yet, the Liechtenstein government has signed a FATCA IGA. Later this year a law is to be put before the parliament to allow its implementation in the Ländle: (German article)
   http://www.vaterland.li/index.cfm?source=lv&id=28891

   Liechtenstein is a kind of Swiss canton, but ruled by a prince.

9. PR release in English:

   “Liechtenstein and the United States sign FATCA Agreement

   Prime Minister Adrian Hasler and the U.S. Chargé d’Affaires to Liechtenstein, Jeffrey R. Cellars, signed an agreement to implement the provisions of the Foreign Account Tax Compliance Act (FATCA) on 16 May 2014. With this, access to the U.S. capital market for Liechtenstein Financial Institutions is ensured.

   In the course of the negotiations, which were in essence completed by the end of 2013, an agreement was reached regarding important issues for Liechtenstein Financial Institutions and in the best interest of Liechtenstein.

   With FATCA, the U.S. is aiming to ensure that all accounts of individuals who are taxable in the U.S. which are held abroad are reported. FATCA is a unilateral U.S. legislation with worldwide applicability. Foreign Financial Institutions are obliged to pass information on U.S.-accounts to the U.S. Tax Authorities (Internal Revenue Services, IRS) or be subject to a substantial withholding penalty.

   Agreement ensures access to U.S. capital market

   “The Liechtenstein Financial Centre is characterized by high-quality services for an international and sophisticated clientele,” said Prime Minister Adrian Hasler at the signing in Vaduz. “The unhampered access to U.S. capital markets, which has been secured by the agreement, is essential for Liechtenstein providers of financial services.”

   Facilitation and legal certainty achieved

   Liechtenstein has, in coordination with the associations of the financial centre, decided to conclude a so-called Intergovernmental Agreement (IGA). The implementation of FATCA is associated with notable administrative and financial efforts for the financial institutions. These efforts are reduced with the FATCA Agreement, due to the fact that the agreement implements administrative facilitations and brings clarity regarding the treatment of financial institutions and their products.

   Competent Authorities to exchange information The provisions of the agreement provide for the automatic exchange of information concerning assets held by U.S.-Persons at Liechtenstein financial institutions to be exchanged by the tax authorities of the two countries.

   To implement FATCA, the Liechtenstein Government plans to submit legislation to Liechtenstein Parliament in the course of this year.”

10. The deadline for providing info from some of the banks has been extended by another month.

    http://www.swissinfo.ch/eng/business/US_extends_deadline_for_Swiss_banks_in_tax_case.html?cid=38737100

11. A more interesting change is the move from Model 2 towards 1… I am not sure what the thinking behind this path has been. Is it to reduce the burden or liability on FFIs or rather the desire to hope for reciprocity, or offer competent authorities with some juicy insights that otherwise they would not have had access to?

12. http://www.efd.admin.ch/00468/index.html?lang=en&msg-id=53267

13. Example of how the US fails to warn immigrants with pre-existing accounts. It demands proof that they already hold sufficient funds in order to immigrate. So, where would those funds be held BEFORE people immigrate to the US? In their home country of course. So failing to tell them of FBAR is a sin of omission on the part of the US.

    Ex.
    See:
    http://federaltaxcrimes.blogspot.ca/2012/04/open-forum-comments-to-congress-and-irs.html#comment-1425202447

    “……had the IRS sent an FBAR filing requirement to
    all resident aliens that we would not be in this mess. Immigrants are in
    unchartered territory here, it can take years to “understand” the American way
    of life before we can even start to “fit in”. Arriving here and settling in
    takes a while, our main concern was to find a school for our children, buy a
    home and cars, opening a business later on. Learning how to fill in a tax
    return has never been one of our priorities because there are accountants who
    do this for us and are supposed to know what to do.

    We remember distinctly that one of the criteria for
    obtaining a green card is that we had to be properly funded before entering the
    U.S. We showed the authorities our Swiss account balances and the name of the
    bank a first time back then. ….”

14. http://www.tax-news.com/news/Switzerland_Enacts_Law_To_Support_FATCA____64929.html

    “…….FATCA implementation in Switzerland will be facilitated by a Model Two Intergovernmental Agreement, which requires Swiss financial institutions to disclose account details directly to the US tax authority with the consent of the US clients concerned. The US will have to request data on any recalcitrant clients through the normal administrative assistance channels.

    Meanwhile, the Federal Council is seeking to switch to Model One, which provides for the automatic exchange of information through a centralized authority.”

    Interesting re the Federal Council seeking to switch from Model Two to Model one?

15. https://www.news.admin.ch/message/index.html?lang=en&msg-id=53267
    “Federal Council brings FATCA Act into force
    Bern, 06.06.2014 – Following the entry into force of the FATCA agreement on 2 June 2014, the Federal Council decided during today’s meeting to bring the FATCA Act approved by parliament into force on 30 June 2014. This will facilitate Swiss financial institutions’ implementation of the new FATCA regulations for US persons. The worldwide implementation of FATCA will commence on 1 July 2014.”…………

    ………..”…On 21 May 2014, the Federal Council approved the draft mandate for negotiations with the United States on switching to Model 1, which provides for the automatic exchange of information. It is still unknown at the present time when there will be a corresponding agreement.”

16. @Badger

    If they change the IGA, this would be another chance to launch an optional Referendum and/or sue the Confederation within 30 days. We could use the argument that the Confederation has no right to agree to a treaty that takes the form of a competent authority agreement. Only treaties could supersede the Constitution.

    I wonder if they are intending to keep the protections in any new IGA that exclude 2nd and 3rd pillar accounts from FATCA (as in the currrent IGA)?

17. Anybody know anything about this? Here is a vague article stating that 3rd pillar accounts are now being closed as well. They (3a restricted) are specifically excluded in the IGA annexe if I am not mistaken.

    Is this happening because of the other “Program for Swiss Banks” ?

    http://www.rts.ch/info/suisse/5823566-des-banques-suisses-ferment-des-comptes-de-3e-pilier-a-cause-du-conflit-avec-les-usa.html

18. @Jefferson D Tomas, not heard anything myself. I don’t speak French but the impression I get is that it’s Pillar 3a which are also investment accounts of some kind? Investment accounts for Americans haven’t been allowed for some time now so that may be why.

    I’ll post that link over on the English Forum when I can. At the moment I’m blocked as I’ve posted too much this week plus it was the National Day yesterday so a lot of people are away at the moment who would be posting. Once I get it on there maybe someone will have heard something about it.

19. More on the “program for Swiss Banks” which I stated some time ago was more of a clear and present danger to USPs in the CH given that there are some exceptions granted in the FATCA IGA for pre-existing accounts, low value accounts, and retirement accounts.

    It seems that Credit Suisse is going to release 1000 names of employees, Valais Cantonal Bank 15 and Vaud Cantontal Bank 200.

    http://www.rts.ch/info/economie/6037751-dernier-delai-pour-les-banques-suisses-pour-livrer-des-noms-aux-etats-unis.html

    http://www.rts.ch/info/suisse/6016395-la-banque-cantonale-vaudoise-va-livrer-des-noms-aux-etats-unis.html

20. http://www.srf.ch/konsum/themen/geld/auslandschweizer-bei-banken-auf-der-abschussliste

21. Interesting, according to this http://online.wsj.com/news/articles/SB20001424052702304223004580036701095972426 which I found out about here http://the-tax-wars.net/2014/07/21/some-swiss-banks-are-more-than-encouraging-u-s-clients-to-enter-the-ovdp-they-are-offering-financial-incentives/ some Swiss banks are offering financial incentives to enter OVDP.

    If the banks are willing to do this, why wouldn’t they support a litigation in Switzerland along the lines of what ADCS are planning?

22. @Medea Fleecestealer 3rd pillar A are similar to IRAs but have very strict rules about when money can be taken out and what sorts of funds they can be invested in. They were excluded from “financial accounts” in the Annexe of the IGA.

23. ABS addresses Myth 1, 2 & 7:

    http://www.abs.ch/de/ueber-die-abs/die-abs-aktuell/aktuelle-meldungen/news/2014/06/26/abkommen-mit-den-usa-bringt-formularpflicht/

24. https://twitter.com/USEmbassyBern

    I came across this twitter site over at FATCA Daily on linkedin and was wondering if any Americans living in Switzerland even bother to visit the US embassy anymore, other than for the purpose of getting rid of US citizenship.

    I really feel for the Americans living in Switzerland, if there are any left, they really took the brunt of the blitzkrieg attack on expats over the last few years.

25. http://www.bloomberg.com/news/2014-08-06/americans-give-up-passports-as-asset-disclosure-rules-start.html

    “Fatca and the Swiss bank disclosure program has intensified the search for U.S. nationals beyond all measure,” said Matthew Ledvina, a U.S. tax lawyer at Anaford AG in Zurich. “It’s shocking the levels of due diligence they are going through to ensure they have cleaned house.”

    Swiss banks are trawling through records going back to the 1990s to find clients with U.S. addresses and telephone numbers, and those who received schooling in the country, Ledvina said. Those identified as U.S. persons are either being asked to leave or placed in special U.S.-only sections of the institution, he said.