bulletEDITOR'S PICKS

 

UAE developer dealt legal blow as it is ordered to repay investors

From Middle East Sep 2 2014 @ 16:48

A legal firm, Judicare Group, has secured a “landmark ruling” in the UAE against a property...
view article

Ashmore unveils trio of China-focused funds

From Products Sep 2 2014 @ 10:17

Ashmore has unveiled three China-focussed funds that aim to invest in China's onshore equity and...
view article


bulletRELATED ARTICLES

 

bulletNEWS

 

LATEST NEWS

UAE developer dealt legal blow as it is ordered to repay investors

UAE developer dealt legal blow as it is ordered to repay investorsA legal firm, Judicare Group, has secured a “landmark ruling” in the UAE against a...
view article

European Wealth snaps up two more Barclays...

From Europe Sep 2 2014 @ 15:33

Ogier opens Hong Kong resolution team

From Asia Sep 2 2014 @ 15:20

MORE FROM Middle East

LATEST NEWS

Sesame most complained about advisory firm

Sesame most complained about advisory firmSesame received more complaints than any other advisory firm over the first half...
view article

Ashmore unveils trio of China-focused funds

From Products Sep 2 2014 @ 10:17

Mirabaud adds to Middle East team

From Middle East Sep 2 2014 @ 09:59

MORE FROM United Kingdom

LATEST NEWS

Invesco Powershares adds Swiss business development role

Invesco Powershares adds Swiss business development roleInvesco Powershares has appointed Giles Boitel as business development director...
view article

Former BNP Paribas wealth head switches to...

From People Sep 1 2014 @ 17:21

Overseas Trust & Pension launches QROPS...

From Products Sep 1 2014 @ 17:13

MORE FROM People



Switzerland signs tax avoidance deal with US

From Tax & Regulation Feb 14 2013 BY: Phil Halliday

Add to My News Comments (0)

Add to My News Print

Add to My News

add to twitter

add to linkedin


The Swiss government has signed a deal with the US that will reveal to Washington those American tax payers who hold accounts in Switzerland. The move, designed to unveil potential tax evaders, calls into question Switzerland’s tradition of banking secrecy.

The agreement to implement the US Foreign Account Tax Compliance Act (Fatca) was signed on Wednesday in Bern by Swiss state secretary Michael Ambühl and the US ambassador Donald S. Beyer after it was agreed by the Swiss Federal Council.

The text of the agreement will be published and has to be submitted to parliament for approval and is subject to an optional referendum.
Under Fatca, the US wishes to ensure that all income earned worldwide by US taxpayers on accounts held abroad can be taxed by the US.

Fatca requires foreign financial institutions to notify the US tax authorities (Internal Revenue Service) about identified US accounts. On-site inspections by the IRS at the financial institutions concerned are not permitted.

The agreement ensures that the accounts held by US persons with Swiss financial institutions are disclosed to the US tax authorities. Information will not be transferred automatically in the absence of consent, and instead will be exchanged only on the basis of the administrative assistance clause in the double taxation agreement.

Fatca goes live in the US from 1 January 2014 and Swiss financial institutions will be forced to implement it from this date, or be excluded from the US capital markets. Fatca obliges foreign companies to report offshore accounts by US tax payers that amount to more than $50,000 (SFr45,943).

Swiss finance minister Eveline Widmer-Schlumpf said the deal would allow for certain exceptions, notably for the Swiss insurance sector, pension funds and the Swiss National Bank.

Switzerland will be the second state, behind Japan, to sign up to this agreement. Widmer-Schlumpf said the decision was not taken lightly: “Fatca is not something to rejoice about. But it is a pragmatic solution,” she said.

Swiss banks active in international financial markets have no choice but to apply the US rules, she added.

Swiss political parties remain divided over Fatca with the right-wing Swiss People’s party and centre-right Radical party the most critical, while the Christian Democrats, Social Democratic party and Green party have given it their support.

Fatca was passed in the US in 2010 as part of the Hiring Incentives to Restore Employment Act. It is designed to close loopholes in existing tax compliancy regulations, known as the Qualified Intermediary (QI) accord.

Widmer-Schlumpf said negotiations with Washington on a global settlement for outstanding tax issues were under way. She said US authorities had given assurances that acceptance of the Fatca deal would be considered beneficial to speed up a global deal for Swiss banks that risk court proceedings in the US over illegal tax practices.

The Fatca deal also raises the question of whether Switzerland would accept the exchange of bank data with the European Union. Switzerland has so far refused such demands from Brussels, saying bilateral agreements with individual EU member states on a withholding tax were more practical.

Similar accords with the UK and Austria came into force at the beginning of the year. A deal with Berlin was rejected by the German parliament. Negotiations with a number of other countries are pending.

 

Add to My News Comments (0)

Add to My News Print

Add to My News

add to twitter

add to linkedin



TAGS:

COMMENTS


Have your say

(Be the first to) Have your say!

Please sign in or register here to leave a comment. Registration is free and only takes a few moments.






Share us on Twitter

SHARE US ON TWITTER
Join the community

Join us on Linked In

SHARE ON LINKED IN
Inform your colleagues

Switch to our mobile site

SWITCH TO MOBILE SITE
News on the go

Back tot he top of the page

BACK TO TOP OF PAGE
Just click here...