The US and Switzerland have signed a memorandum of understanding (MoU) in Washington on technical and administrative interpretations of the agreement on the Foreign Account Tax Compliance Act (FATCA).
The MoU was signed by Manuel Sager, Swiss ambassador to the US, and Mark Mazur, US’ assistant secretary for tax policy.
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The agreement summarises the obligations of Swiss financial institutions, states the relationship with the qualified intermediary system, and confirms the simplified self-declaration for exempt Swiss beneficial owners under the FATCA agreement signed on 14 February 2013.
It also states that Swiss financial institutions can generally apply definitions from the implementing provisions of the US Department of the Treasury if these simplify matters relative to the definitions in the FATCA agreement.
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By GlobalDataThe Swiss Federal Council agreed to adopt the changes to the US FATCA agreement on 10 April, allowing Swiss financial institutions to share information with US tax authorities. Switzerland initially agreed to sign and implement the FATCA agreement in December 2012.
The FATCA agreement requires foreign financial institutions operating within the US to register with the US tax authorities and disclose information to the Inland Revenue Service (IRS), on all accounts held by US taxpayers, otherwise they will be subjected to a 30% withholding tax.
The Swiss Federal Council said in a statement: "The agreement ensures that the accounts held by US persons with Swiss financial institutions are disclosed to the US tax authorities either with the consent of the account holder or through normal administrative assistance channels."
Countries on board
The US reached an agreement with France, Germany, Italy, Spain and the United Kingdom to simplify the collection of tax information for FATCA in February 2012.
In May 2013, Singapore also announced plans to finalise an agreement with the US on the FATCA, alongside agreeing to sign up to the Organisation for Economic Cooperation and Development’s (OECD) multilateral treaty on sharing tax details sometime in due course of the year.
