The 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.
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.
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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."
Exemptions to still apply
The agreement will still see exemptions on information being shared on social security, private retirement funds and casualty and property insurances.
The FATCA agreement was signed by Switzerland and the US in February of this year, and will come into effect on 1 January 2014.
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By GlobalDataThe Swiss Federal Council added: "While the extraterritorial US tax legislation was generally criticised, it was nevertheless acknowledged that, with the agreement, Switzerland had achieved simplifications in the implementation of the legislation for Swiss financial institutions."
The FATCA legislation has been implemented by the US to ensure earnings made by US citizens worldwide can be taxed by the IRS.
