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Switzerland and US Sign New Agreement on Account Data Exchange

1 July 2024 | Legal Alerts
On 27 June 2024, Switzerland and the United States signed a new FATCA agreement in Bern. Currently, Switzerland unilaterally provides financial account data to the United States. Under the new agreement, Switzerland will also receive similar information from the United States through an automatic exchange of information. This change is expected to be implemented in 2027.
Switzerland and US Sign New Agreement on Account Data Exchange
The Foreign Account Tax Compliance Act (FATCA) is a US regulatory framework that has been in effect globally since 1 January 2014. It mandates foreign financial institutions to report information on US accounts to the Internal Revenue Service or impose a tax.
Switzerland currently implements FATCA under Model 2, which requires Swiss financial institutions to disclose account details directly to the US tax authority, provided they have the consent of the US clients involved. If US clients do not consent, the United States must request this data through standard administrative assistance channels. In contrast, no account data is sent from the United States to Switzerland.
In October 2014, the Federal Council decided to implement the automatic exchange of information.
The Federal Council tasked the Federal Department of Finance (FDF) with negotiating a transition from Model 2 to Model 1 with the United States. Model 1 facilitates the mutual automatic exchange of account data between the tax authorities of both countries. This shift will enable Switzerland to receive account information from the United States. Under this new model, Swiss financial institutions will submit the necessary data to the Federal Tax Administration (FTA) instead of directly to US authorities. The FTA will then forward the information to the Internal Revenue Service.
Switzerland and US Sign New Agreement on Account Data Exchange
To implement the FATCA agreement, amendments to national legislation are required. The Federal Assembly in Switzerland will be responsible for this decision. According to the planned schedule, Switzerland's adoption of the new model is set to take effect on 1 January 2027.

  1. https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-101674.html
  2. https://www.sif.admin.ch/sif/en/home/bilateral-relations/countries/united-states-america/fatca-agreement.html


This legal alert provides a general overview of the topic and should not be considered legal advice. Legal situations may vary, and businesses should consult with legal professionals to address their specific concerns.
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