US and Switzerland Sign New FATCA Agreement
Amidst ongoing negotiations between the US and foreign governments to increase taxpayer compliance abroad, Switzerland became the eighth country to sign a Foreign Account Tax Compliance Agreement (FATCA) on Feb . 13, 2013, joining: Italy, Norway, the U.K., Denmark, Ireland, Mexico and Spain. The Swiss are known for their banking secrecy and as being a “tax haven,”making the signing a huge step towards the Internal Revenue Service’s (IRS) goal of increasing tax compliance abroad.
The accord requires Swiss financial institutions to report information on US accounts held there to the IRS, provided there is consent between parties. In the absence of consent, group requests can be made on the basis of the administrative assistance clause in the agreement. In essence, no US account holder in Switzerland will be immune from transparency to the IRS. The stated goals of the agreement are: “to Improve tax compliance, combat international tax evasion and implement FATCA.”
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