Switzerland is preparing for the FATCA enforcement.

24.04.2014

Foreign Account Tax Compliance Act (FATCA), that was singed by USA Congress in September, 2010, is expected to enter into force on the 1^st of July 2014. According to FATCA banks supposed to submit information about U.S. citizens’ accounts to IRS of United States. Citizens of other countries, which live in USA as well as American expats and foreign shareholders of American holding companies also fall under these rules.

In response to that Switzerland’s Federal Tax Administration (FTA) had already prepared special letter, which should be sent by Swiss banks to their American clients. In the letter banks are asking for clients’ permission for submission of information to IRS.

In case of the client’s refusal or not answering of the letter, client information is listed in the special list without mention of client’s personal data. These clients also can appeal to FTA with request of non-submission of their information to IRS. In case of dismissing of the request, client can go to the Swiss Federal Administrative Court, which decision will be final.

Source: http://www.estv.admin.ch/intsteuerrecht/themen/01458/01648/index.html?lang=en

Expert’s opinion

FATCA is American Law that requires non-residential financial institutions to disclose and to submit information about U.S. citizens’ accounts to IRS of USA. Here goes the twist: the law is American, but… it is creating obligations for financial institutions outside of the USA jurisdiction.

Countries as well as bank organizations are singing and accepting FATCA since the sanction for non-singing it is dreadful – up to the shutdown of the accounts. It is impossible to live and work without the main currency, is it not?

Lately, thousands of Americans are renouncing citizenship and giving back Green Cards. Free country is no longer free anymore.

Nonetheless, it will be not right to think that USA have no relation to us whatsoever. Recent events show otherwise and force us to think not only about securing of the accounts, but about diversification of accounts and currencies as well.

Irina Lomakina ( Director of the Moscow Office, Honest&Bright)