US Clients Contacted By Swiss Tax Authority
US persons with Swiss bank accounts will soon be receiving a letter requesting their permission to send their account information to the Internal Revenue Service (IRS), as part of the Foreign Account Tax Compliance Act (FATCA).
On Tuesday, 22nd April, Switzerland’s Federal Tax Administration (FTA) announced this move and provided the content of the letter, which has been prepared for its banks to include when contacting American clients. If the account holders refuse to give permission or fail to respond to the letter, they will be put on a list (without revealing their identity) of ‘non-consenting US accounts.’
As part of this administrative assistance procedure, US persons with Swiss bank accounts will also be able to appeal to the FTA, asking that their account information is not transferred to the IRS. If the FTA declines the request, the clients have another 30 days to appeal to the Swiss Federal Administrative Court, the decision of which is final.
FATCA was enacted in 2010 in order to fight offshore tax evasion by US citizens and comes into effect on July 1st 2014. FATCA stipulates that all foreign financial institutions, including those which do not operate in the US, give up the data of customers who are subject to American tax.
If you are unsure how this affects you or need more information contact us.
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