Opalesque Industry Update - The agreement on the implementation of FATCA in Switzerland
was initiated on 3rd December 2012. The Swiss Funds Association SFA (SFA) welcomes the resultant
increase in legal certainty, as well as the reduction in the workload entailed in
FATCA entered into force in the US on 18 March 2010, the aim being to ensure that all accounts held abroad by US taxpayers are taxed. Foreign financial institutions (FFIs) have to conclude an agreement with the US tax authorities and must undertake to report information on US accounts. In mid-2012, Switzerland and the US published a joint statement setting out a framework for possible simplifications in the implementation of FATCA. For example, certain financial institutions such as social security institutions, pension funds and property insurers would be exempt. Institutions that are predominantly locally active are to be automatically deemed FATCA-compliant. The corresponding agreement between the two countries was initialed yesterday.
Although the text of the agreement will only be published once it has been signed, it can already be assumed that the solution found will also alleviate certain aspects for the fund industry in Switzerland. For example, collective investment vehicles in particular will be deemed FATCA-compliant subject to certain requirements, and will only be subject to a registration obligation.
The agreement also clarifies the exemption regulations for social security and pension institutions, and thus also for single-investor funds and qualified investor funds (QIFs), which are reserved for these institutions.
“We welcome the greater legal certainty in an area that is important for the entire financial sector. We are pleased to note that the workload in implementing FATCA will be reduced for the financial institutions involved,” said Dr. Matthäus Den Otter, CEO of the SFA.
Press release, 4 December, 2012
The Swiss Funds Association www.sfa.ch