Americans with Swiss bank accounts are getting post in connection with the Foreign Account Tax Compliance Act (FATCA) from Switzerland’s Federal Tax Administration (FTA). In a statement on Tuesday, the FTA announced that it had prepared the letter for banks to include when writing to US bank clients.This content was published on April 22, 2014 - 21:08
The letter describes the steps involved in a possible administrative assistance procedure under the FATCA agreement. Swiss banks are supposed to ask their customers to consent to having their account information sent to the Internal Revenue Service (IRS) – the American tax authority.
If they say “no” or fail to respond, then their accounts will be put on a list of “non-consenting US accounts” – without mentioning the identity of the clients, who have the right to ask their banks for copies of documents related to the matter.
These clients can also appeal to the FTA asking that their account information not be 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.
In 2010, the US Congress adopted FATCA to fight offshore tax evasion by US citizens. It demands that all foreign financial institutions (banks, life insurance companies, investment funds, foundations) – including even those not operating in the US – give up the data of customers who are subject to American tax.
This means all American citizens or non-nationals resident in the US, American expatriates, and foreigners with significant holdings in the US. All financial institutions abroad are required to register with the IRS.
The FATCA agreement takes effect on July 1, 2014.
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