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07
dec

Switzerland and the U.S. initial the FATCA agreement

December 4, 2012 Switzerland and the U.S. initialed an agreement on the simplified implementation of the U.S. tax legislation FATCA

The initialed agreement provides for the following simplifications for significant segments of the Swiss financial industry:
• Social Security, private retirement funds as well as casualty and property insurances are exempt from the application of FATCA;
• Collective investment vehicles as well as financial institutions with a predominantly local clientele are deemed, under certain requirements, to be FATCA-compliant and are subject only to a registration obligation;
• The due diligence obligations on the identification of U.S. clients to which the rest of the Swiss financial institutions are subject are created in such a way that they can reduce the administrative burden.
The agreement ensures that accounts held by U.S. persons at Swiss financial institutions are reported either with the consent of the account holder or by administrative assistance channels through group requests. If consent is not given, the information will not be exchanged automatically, but only on the basis of the administrative assistance provision in the Swiss-U.S. Double Taxation Convention.

The agreement is subject to the approval of the Swiss Parliament and to an optional treaty referendum.

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