SWITZERLAND and the United States have
signed a Foreign Account Tax Compliance Act (FATCA) agreement in Bern, which was
initiated in Dec 2012, and provides for simplifications in implementing FATCA
which will help Swiss financial institutions to exchange information with the
IRS. The Final Regulations published by the US Treasury and the IRS on January
17, 2013, are applicable to Swiss financial institutions to the extent that the
agreement and its annexes do not expressly make provision for derogations from
the rules.
The agreement that
has now been signed provides for simplifications for large sections of the Swiss
financial industry:
• Social security
funds, private pension funds and property and casualty insurers are excluded
from the scope of FATCA.
• Collective
investment vehicles and financial institutions with a predominantly local
clientele who are at least 98% from Switzerland or the EU are deemed FATCA
compliant under certain conditions and are subject only to a registration
obligation and the associated obligations.
• The due
diligence requirements for the identification of US clients, to which all other
Swiss financial institutions are subject, are designed in such a way that the
administrative burden is kept within reasonable limits.
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