Intergovernmental Agreement Fatca Switzerland
In accordance with the Taiwan Relations Act, the parties to the agreement are the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States. On October 8, 2014, the Federal Council approved the negotiating mandate with the United States on the transition to Model 1, which provides for the automatic exchange of information. The date of such an agreement is not yet known. Along with many other countries, Switzerland has entered into an intergovernmental agreement with the United States to facilitate the implementation of FATCA. On the basis of this intergovernmental agreement (the Swiss FATCA Agreement), which came into force on 30 June 2014, a Swiss fatca law was promulgated. The FATCA agreement reduces implementation costs for Swiss financial institutions. A declaring Swiss IF must register with the IRS and enter into an FFI agreement with the IRS. Among the most indebted commitments of a Swiss IF related under the FFI agreement: since the adoption of FATCA, several countries, including some of Switzerland`s neighbours (France, Germany and Italy), have concluded a so-called first government agreement or have begun negotiations with the US Treasury Department6. Non-U.S.
banks holding U.S. securities on behalf of their underlying clients act as intermediaries. The IQ program allows certain non-U.S. intermediaries to enter into a contract with the U.S. Internal Revenue Service (IRS) and to assume tax obligations normally reserved for U.S. financial institutions. The IQ agreement writes to the QIs the following important commitments: These statements show only one thing. There are many arguments to test the FATCA group`s application in the Swiss courts. In all likelihood, there will be a few cases before the Swiss courts. However, the chances of the Swiss courts ruling in favour of taxpayers are slim. Indeed, the Model II agreement clearly and unequivocally indicates that a group application is admissible on the basis of aggregated reports (i.e.
it is considered relevant). And if the agreement is adopted by the Swiss Parliament in a way that allows the Swiss people to hold a referendum, it is legally binding on all Swiss courts. In other words, Parliament (and, if there is a referendum, public approval) will create a legal basis for FATCA group applications, which will be binding on The Swiss courts. The current FATCA agreement between Switzerland and the United States is based on Model 2. Under this model, Swiss financial institutions make directly available to the US tax authorities (IRS) account information that must be reported with the consent of the affected clients. In cases where no consent has been given, an anonymous and aggregated report containing certain account information is provided. On the basis of the aggregate declaration, U.S. tax authorities may request disclosure of certain customer and account information through a request for mutual assistance, as required by the Swiss/U.S. Double Taxation Convention.