The Foreign Account Tax Compliance Act (FATCA) is a US regulation that has applied to all countries worldwide since January 1, 2014. It requires foreign financial institutions to disclose information about US accounts to the US tax authorities or to levy a tax.
Switzerland is currently implementing FATCA in accordance with Model 2. Under this model, Swiss financial institutions report account data directly to the US tax authorities with the consent of the US clients concerned. The USA must request data on non-consenting US clients via the normal administrative assistance channels. Conversely, no account data flows from the USA to Switzerland.
In October 2014, the Federal Council decided to introduce the automatic exchange of information. As a result, it instructed the Federal Department of Finance (FDF) to enter into negotiations with the USA to switch from Model 2 to Model 1. Under Model 1, the tax authorities of both countries automatically exchange information on account data with each other. This means that Switzerland will now also receive account data from the USA. The Swiss financial institutions will not provide the required data to the US authorities as before, but to the Federal Tax Administration (FTA), which will then transmit it to the US tax authorities.
The implementation of the FATCA agreement requires an amendment to national law. In Switzerland, the Federal Assembly will decide on this. According to current planning, the model change should come into force in Switzerland on January 1, 2027.
The new FATCA agreement is available here .
