FATCA and Switzerland
Posts on The Isaac Brock Society website concerning FATCA and Switzerland
For articles on other websites, see Media and Blog Articles
For general discussion of FATCA, see FATCA Discussion Thread
October 2016
20: Ambassador Reaches Out to Swiss Banks
March 2016
14: Hillary Clinton Directly Enabled Tax Evasion in the Swiss Bank Debacle, I Kid You Not
July 2015
01: Very Swiss Vacations for the Federal Counselors
October 2014
May 2014
28: Updated Video: Rand Paul discussing US Swiss Tax Treaty with Senate Democrats
April 2014
08: Post Mortem of Vaudois League as to FATCA Referendum
March 2014
January 2014
December 2013
19: FATCA What’s-it? (Vaud League, Switzerland)
15: #Americansabroad in Switzerland should not enter #OVDP and join #FBAR Fundraiser
14: Most Swiss banks considering #OVDP should NOT consider #Wegelin in their decision
November 2013
24: Stopping FATCA in Switzerland
October 2013
19: FATCA: Breaking through Fear with a Swiss Referendum
02: Swiss REFERENDUM against #FATCA / Thursday October 3rd 2013
September 2013
09: FATCA IGA and Application Law Approved by Swiss Parliament
August 2013
30: It’s Official: New #OVDP program designed for Swiss Banks
June 2013
19: Switzerland voted against joining OVDI (Lex USA)
March 2013
21: US Renunciations In Switzerland for 2012
10: SWAT–Switzerland IGA: Still not enough information available in Switzerland.
February 2013
07: Switzerland Did Not Respect International Judicial Assistance Rules with the USA
January 2013
29: Packing up, going home: one US citizen in Switzerland vents his anger
14: UDC Parliamentary Deputy: “Switzerland has been too naive up to now”
November 2012
23: UBS asks “US persons” in Switzerland to Renounce Swiss Data Protection – Let the Outrage Begin!
05: Switzerland, threatened by isolation, lifting veil on secret bank accounts
October 2012
22: Tribune de Genève: Americans in Switzerland Tend to Support Barack Obama
September 2012
01: Criminal Complaint in Switzerland for Theft and Fencing Stolen Property
August 2012
23: Triple Referendum Launched in Switzerland Against Tax Treaties With Three European Countries
One doesn’t question diktats, Badger.
@badger
Not to be paranoid… so the names of the attendee goes on a *list*… so they can be Santa… so they can check their list twice? Well… u could use a fake name… what info can they give u that would help… ohh… I know… jump into OVID… its in your best interest
Notice they only talk about citizens… no mention of the GC holders… accidental citizens… the different ways they gotcha u
@USForeignPerson;
Yes, I would think twice about getting on any lists. And it is like lambs asking the wolf for advice – in Switzerland no less, after all the past years of US threats and aggressive public statements.
@bubblebustin, very apt. I never really knew what that term meant before, and had to look it up, so I provide it here for other readers;
“A diktat is a statute, harsh penalty or settlement imposed upon a defeated party by the victor, or a dogmatic decree. The term has acquired a pejorative sense, to describe a set of rules dictated by a foreign power or an unpopular local power. The phrases “To impose its values” or “give orders” can be synonymous with giving a diktat…..”
http://en.wikipedia.org/wiki/Diktat
In parallel:
“Weil viele Eritreer in der Schweiz keine Arbeit haben, begleichen sie die Steuerschulden mit Geld aus der Sozialhilfe. ”
http://www.tagesanzeiger.ch/schweiz/standard/Eritrea-treibt-bei-Fluechtlingen-Steuern-ein/story/26925001
@Orwell — I came across the same story the other day as well…
Radio Télévision Suisse (in French) http://www.rts.ch/info/suisse/6383197-comment-l-erythree-fait-pression-et-extorque-ses-ressortissants-en-suisse.html
Neue Zürcher Zeitzung (German) http://www.nzz.ch/nzzas/nzz-am-sonntag/die-harte-hand-von-eritreas-regime-in-der-schweiz-1.18444408
Swissinfo (English) http://www.swissinfo.ch/eng/eritreans-vulnerable-at-home-and-in-switzerland/41170142
And again, the article Orwell found: http://www.tagesanzeiger.ch/schweiz/standard/Eritrea-treibt-bei-Fluechtlingen-Steuern-ein/story/26925001
Just as many at IBS have said for years, extraterritorial taxation policies steal from countries that the doubly-taxed live in. But they also can put poor people in a even sorrier state than they would otherwise be. Social welfare payments, unlike unemployment benefits in Switzerland, are intended to provide a minimum level of subsistence, if you read French or would like to decipher using Google Translate or the like, here is an example from the Canton of Vaud which is one of the Cantons that publishes its welfare guidelines in detail: http://www.vd.ch/fileadmin/user_upload/organisation/dsas/spas/fichiers_pdf/Normes_RI_2014.pdf.
It is unclear if the 2% being demanded by Eritrea is calculated on cash income or would include payments in kind, such as reimbursement for rent or mandatory health insurance. But for sake of argument, let us imagine a family of 3 (mother, father, child) who receive a 36’000 in benefits, including rent for a cheap 2 room apartment, health insurance, and cash benefit to feed, clothe, and bus themselves. 2% would mean 600+ francs, a rather significant sum for a family with very little left over at the end of the month.
The articles talk about refugees, and admittedly most of us are not originally such (though might now consider ourselves to be since the FATCA era began), and there are also strange things going on such as unauthorized government-sponsored trips back to Eritrea on fake documents provided by the Eritrean authorities (which violate the conditions of asylum and mean that Switzerland is paying benefits in some cases where it should instead deport the individuals back to Eritrea), but the number of 20’000 Eritreans in Switzerland cited in the Tages Anzeiger, NZZ, and Swissinfo articles is not far off of the estimations I have seen of the American population in Switzerland.
Let us take the example family above, and imagine they were USPs. After the standard and dependent deductions, over 20k of the revenue in cash or in kind would be taxed by the US. And no Foreign Earned Income Exclusion here because the welfare benefits are not gainfully “earned”. Even in the lowest US tax bracket, I think it is safe to say that we are talking about considerably more than 2%.
And once again in the case of Eritrea, though the issue was brought up at least as far back as 2012 “Un problème révélé en 2012 déjà”: “Aucune mesure de la Confédération” i.e. [Swiss Federal Authorities ain’t doing s—t about it]. As usual. And UBS is involved in transfering the money “Le fruit de cette imposition transiterait ensuite vers le régime par un compte UBS à Zurich.” (RTS article)
In our case, the Confederation not only did nothing about it, but they bent over for Uncle Sam to boot. We cannot allow ourselves to be put in the same sack as the people who UBS wooed to hide their US-sourced income and wealth at the bank. The Confederation must show discernment and recognize that the situation of most of us is very different than that of those that helped to provoke the current FATBARDT jihad against USPs abroad.
I think that we should respond to these articles (the Swissinfo and NZZ article appear to be open for comments). In many ways, our situation is worse, now that the banks are employed, under FATCA, to do the bullying, we are extorted in a more hidden way, but the effect is the same. I think that the Swiss people see the situation with Eritrea to be outrageous, and there must be some way to get them to recognize that there is another outrageous situation going on, perpetrated by a hypocritical foreign country who has itself condemned Eritrea’s extraterritorial taxation policies.
Please join me in posting comments to these articles where possible. I notice that already a “George Santino” posted at NZZ http://www.nzz.ch/nzzas/nzz-am-sonntag/die-harte-hand-von-eritreas-regime-in-der-schweiz-1.18444408, to wit:
We will see if my comment is accepted:
http://www.swissinfo.ch/eng/eritreans-vulnerable-at-home-and-in-switzerland/41170142?moreComments=true#comment_54953a88e4b051fc1c6c3da9
@Brockers in CH
What would you all think of setting up a William Tell Society blog as a new place for us to join together to fight the pig that is FATBARDT and try to help each other survive in the FATCA dark ages? Not a scism with IBS, but a replication of the IBS DNA to make the whole movement stronger as has happened with the creation of Maple, ADCS, and many of the other blogs and sites that Brockers have set up on their own.
We could make frequent crossposts and pingbacks here on our Switzerland IBS thread to keep other Brockers updated.
What would you suggest we call the participants? Tellers? Crossbowmen and women?
Any suggestions for a good Swiss-based blog platform that we could start out on? Perhaps a free one at first and then perhaps graduate to something a bit more serious like what Petros did with the .com to .ca move to a paid hosting service?
How would we deal with the 4 national languages + English issue?
Any brainstorming welcome please.
Somebody mentioned this somewhere else in an IBS comment I think, but has anyone seen the articles on Justice Scalia’s speech at the University of Fribourg where he is purported to have said that torture is not unconstitutional? I found out about this a few days ago and it really pissed me off.
English: http://www.huffingtonpost.com/2014/12/12/antonin-scalia-constitution-torture_n_6316240.html
French: http://www.rts.ch/info/monde/6378744-la-torture-pas-anticonstitutionnelle-dit-le-doyen-de-la-cour-supreme-us.html
Who let this bozo into Switzerland? How dare he validate the spooks’ policies of torture? Of course it is unconstitutional, whether we consider it a “punishment” under the 8th Amendment or not. To torture somebody you have to detain them and extract information in a manner that violates the 5th amendment guarantee of due process.
As always, I fear that the judiciary may not be completely independent, despite some favorable rulings from time to time. Ok, maybe Scalia would overturn himself if somebody presented the right argument. After all, judges do not interpret the law by themselves, their decisions are also impacted by an appreciation of the merits of arguments provided by lawyers in their courts.
I just cannot believe that a Supreme Court Justice would take such a position!
http://federaltaxcrimes.blogspot.co.uk/2014/12/swiss-change-rules-for-notifying-us.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+blogspot/oGeEWy+%28Federal+Tax+Crimes%29
I hope a referendum is raised.
@Jefferson D Tomas, I don’t think the Swiss will be particularly impressed by Americans taking over their national hero for their own ends. So a different name possibly to consider. Really not sure how active you could get the Swiss to be on the subject either. After all the referendum failed and there’s not been much about it since and as most Swiss aren’t affected by this I see it being more of a struggle to get any action than the Canadians have managed. Given that only people with Swiss citizenship can vote I can’t really see much happening frankly. If it affected them much more directly maybe, or if the American population was bigger perhaps, but I can’t see this as being more than a place for those of us affected to talk to each other about it and guide anyone new who’s looking for info. not that that’s a bad thing. A certain amount of that will probably get covered over on the English Forum too, certainly I now warn any Americans who’re moving over to check their US tax obligations and bring copies of tax returns in their new bank wants to see them before they’ll allow them to have a bank account.
If you did go ahead I think you’d need English, French and German to make sure to get coverage over all the country. Though Ticino is Italian speaking I believe most people down there will also speak either German or French. Romansch is simply too small to bother with. Here’s the breakdown:
Native speakers number about 64 percent (4.6 million) for German, 20 percent (1.5 million) for French (mostly Swiss French, 6.5 percent (0.5 million) for Italian and less than 0.5 percent (35,000) for Romansch.
I think this forum here is a good starter as a place for CH-specific chatter.
Though if someone is prepared to start an IBS Swiss Chapter / website, by all means go for it!
In my opinion there are a few things to keep in mind:
1. Number of affected USPs in CH is significant – in the tens thousands – but is incrementally diminishing as people go to Bern for renouncing/relinquishing. I specifically state affected, because the temporary expats and Geneva-based NGO/UN etc. persons are generally unaffected.
2. The “parliament has spoken” — and CH is unique in their status of being targeted by DOJ – literally! As a result, there is an inherent resentment towards supporting USPs.
3. Yes, the Referendum did not collect enough signatures. This has largely to do with the primary driving party was not well accepted. Those behind the party dragged their feet, and lack of political will meant it did not get appropriate attention.
4. That said, new referenda can always be initiated “when the time is right”. However, there is no clear body of persons interested in taking this path, as far as I can tell.
5. An alternative path is a more legal one. As was the case in NL where someone won a lawsuit due to anti-discrimination laws. If such a legal route is taken (rather than a democratic process), then a dedicated website (and fundraising) would possibly make sense.
6. Given that CH anti-discrimination laws, however, do not include a clause prohibiting discrimination by nationality, it is unclear if a similar court case would work in CH as it did in NL. Maybe if it went to European Court of Human Rights? Any takers?
In the mean time, let’s keep this forum active for CH-specific chatter.
Here a recent Bloomberg article:
http://www.garp.org/risk-news-and-resources/risk-headlines/story.aspx?newsId=125021
… and Phil Hogden’s suggestion to “Avoid Bern”: http://hodgen.com/avoid-bern/
update on law & order … maybe worth a more prominent profiling by IBS admins?
http://insideparadeplatz.ch/2014/12/24/us-steuerpolizei-auftritt-der-siegermacht-zuerich/
Thanks for article, orwell! Below is a translation:
“US Tax Police: Performance by the Victors in Zurich
Officials from the Internal Revenue Service to discuss voluntarily – on the soil of the “armpit” district in the city of Zurich – Swiss Federal Government in Bern finds nothing wrong with it.
24/12/2014 by Lukas Hässig
“The US Internal Revenue Service (IRS) is Coming to Switzerland”, says the invitation of the US Embassy in Bern for a two-day event at the end of January in Zurich’s district 4, a blue collar and nightlife area.
The idea of the event is to call US taxpayers to conscience to show that they have power over the world for monetary obligations.
On the US Embassy website, which is promoting the event, is a detailed list of who might owe something to Uncle Sam.
The occasion and the information campaign around it remind you of a victorious power preaching fire and brimstone on conquered territory.
The basis for this is the genuflection by Switzerland in August 2013. The so-called “US Program for Banks” committed the financial center to comprehensive fines and disclosure of all employees.
The United States will use the money for its debts and investments and the names from the banks to help them hunt down the tax evaders.
The big tax war was decided with the “deal” in August 2013. Since then, Switzerland is astonished with the consequences.
Banks that have taken their place in the so-called guilty category 2, note that they are being bled to death. Although they may have had only a few US black money buyers, they have betrayed their people and will pay fines.
In addition, an eternal chokehold threatens. Now some banks try to free themselves from the embrace by jumping into the not-guilty category 3.
The maneuvers of the Swiss financial institutions do not seem to impress the strategists of the superpower. Their campaign continues as if they own the territory of Switzerland.
On January 26, 2015 specialists are to fly from the IRS office in Paris to explain US tax demands at the Zurich event.
According to the announcement on the US Embassy website, IRS officials will provide a “limited number of 15-minute private consultations on individual tax matters”.
Nearly 50 people have been registered in a single dedicated Doodle registration for such private consultations. Around 50 interested people also signed up for the “public presentation on tax-related information” for US taxpayers.
At the Swiss Federal government in Bern, the advance of the IRS is not an issue. Neither the Swiss Federal Justice Department nor the Swiss Federal Tax Administration see a violation of Swiss law.
The Attorney General, in charge of national criminal matters, waved off. “Pure consultations are not criminally relevant,” said a spokeswoman.
The IRS occasion in District 4 sheds light on the self-image of the US in tax matters. “You Can Run But You Cannot Hide”. Washington is calling for its flock.
No matter where one lives: For Americans remain taxable, whoever has any connection to the land of opportunity.
This may be a birth on US soil, a work permit, a longer period of study or of course citizenship.
With global control in place, the Swiss banks are now willing helpers for the US sheriff.
This is the case of a Swiss, who officially returned his “green card”, i.e., work permit, in early 2013 at the US Mission in Lima, Peru.
Shortly thereafter, he was asked by UBS for any US connections. The customer checked the box for all questions regarding America with “No”.
Nevertheless, the Bank in 2014 asked him to submit a tax certificate. Because he did not respond, UBS told him in November to sell all of his assets and will block his accounts by January 2015.
As a reason the Swiss bank gave to its customers that he was subject to relevant regulations as a “US Person residing outside the United States”.
The trigger was the Foreign Account Tax Compliance Act (FATCA). With this Act, the banks around the globe collect all asset information from “US Persons” for the attention of the American world power.
FATCA and earlier disclosures for Americans abroad make all stakeholders transparent citizens.
Such is the case is from a Swiss perspective: Whether a customer cuts the ropes to the US, he remains within reach of the Americans.
Thanks kindly to UBS & Co.”
It’s becoming painfully obvious that FATCA is nothing more than a scorched earth policy that will leave the US worse off than when they started.
What’s stopping the US from penalizing FFI’s for discriminating against Americans when they deny US persons banking services? Shame doesn’t seem to be any kind of barrier for the US – why not?
The below is written by the current U.S. Ambassador to Switzerland and appears in the Swiss-American Chamber of Commerce Yearbook. The ambassador does not mention that Switzerland has the highest rate of renunciations in the world, around 5% per year of eligible dual citizens, as a result of U.S. actions:
“Swiss-American Business Relations – A View from Bern
Resolving the Past, Aiming for the Future
Thanks to forward-leaning and effective negotiations between
Swiss and U.S. officials, we are well placed to see the success-
ful implementation of the Foreign Account Tax Compliance Act
(FATCA) in Switzerland, which goes into effect on July 1, 2014.
This ambitious piece of U.S. legislation, designed to make it
more difficult for Americans to evade paying taxes by stashing
undeclared assets abroad, has worldwide implications. The
Swiss government became one of the first in the world to sign
an implementing agreement, sending a clear message that it
will not permit U.S. tax dodgers to hide undeclared assets in
Switzerland, and the Swiss parliament voted it into law. This
timely and unmistakably positive signal was hailed in Washington,
as dozens of other countries around the world scramble to com-
plete their own agreements in time.
Efforts to address past tax evasion by U.S. taxpayers took a
significant step forward with the introduction of the Depart-
ment of Justice’s “program for Swiss banks” in 2013 and the
constructive response from Swiss banks that want to ensure
that the legacy of the past is resolved once and for all. With
the successful implementation of “the program” to address
the past, and FATCA to guide the future, we can all look for-
ward to turning the page and focusing on other aspects of the
bilateral relationship.”
http://www.amcham.ch/publications/downloads/2014/yb/a-view-from-bern-by-suzan-levine.pdf
@INNOCENTE
Don’t they make it all sound so friendly, so MUTUAL, and not like somebody`s arm was twisted?
Here is an interesting article: http://www.rts.ch/info/economie/6418276-des-clients-francais-d-ubs-et-credit-suisse-ont-attaque-ces-banques-pour-mauvais-conseils.html
It seems that [50 or so] French clients of UBS and Credit Suisse have filed suit against the banks for allegedly having provided bad advice, and such clients may have been found by the French tax authorities.
I must admit that the article does not say what sort of level of income or assets the plaintiffs might have. Or where the money may have been earned. One could imagine the worst. Yet if these people dare to present a cause of action…
I believe that minnow victims of FATCA may have a similar cause of action because IMHO the idiocy of certain banks to solicit funds of US origin provoked the present “tax jihad”., to the detriment of those that simply earned their salaries abroad and paid their foreign tax on such and wanted to stay in the countries where they live without a double extraterritorial burden to report and/or pay additional taxes.
A French-speaking Swiss article says that France buries the idea of 75% tax upon very high incomes: http://www.rts.ch/info/monde/6427941-la-france-enterre-definitivement-la-taxe-a-75-sur-les-tres-hauts-revenus.html
In the article, it is alleged that Francois Hollande (current president of France) promulgated this idea to win the campaign.
I remember that a certain time ago at IBS we discussed this.
See?
We should not be frightened. Please do not be discouraged by the “Savings Clause” with Andorra that another Brocker mentioned may have been negotiated recently. I think that the tide is in our favor. Now is the time to rock the boat to the rhythm of that contra-tide and keep on “brocking”, as it were.
Brock On Folks…
take a look at the table:
http://mobile2.tagesanzeiger.ch/articles/54ac42c387da8bb0ed000001
Note the radical difference in fees stated by Berner KB.
The US and the OECD have succeeded in creating capital controls, both human and financial capital, hence the increased fees for non-residents in Switzerland. Other countries are sure to follow.
So with a shake-up in the USD/CHF rate, what does this mean for USPs resident in CH and earning CHF?
1. Your CHF income will look larger on your 1040 in USD leading to a larger (USD) tax bill
2. When you make payments, you can buy the USD for less …. apox. 15% less
However, since you generally are required to pay in advance, you would have done so at a higher rate, so you are paying at the old rate, for a higher income.
If you are due a refund, and exchange it back into CHF, you’ll get 15% less.
Do others agree with this analysis?
http://www.dailyfx.com/usd-chf
@Orwell
Phantom gains.
But I dont think things will stay this way. The dollar will continue to get stronger while the euro gets weaker- thats the prediction.
@Orwell as to post December 22, 2014 at 5:37 am
As I have mentioned elsewhere at IBS as to CH, please read:
http://isaacbrocksociety.ca/2013/03/16/national-origin-discrimination-is-prohibited-by-many-constitutions-charters-and-declarations-around-the-world/ to wit:
Also, here is an article from last month: “The penal standard against racism celebrates 20 year [anniversary]” (French) http://www.rts.ch/info/suisse/6421561-la-norme-penale-contre-le-racisme-fete-ses-20-ans.html
Interesting article on the SwissInfo wesbite that makes me wonder if most Swiss banks will eventually decide to pull out of the IGA.
http://www.swissinfo.ch/eng/banks-face-expensive-us-tax–holding-pattern-/41220984
In the long run it may be cheaper for them to take any penalty hit than keeping paying their lawyers for the foreseeable future.