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On 7 March 2025, Switzerland’s Federal Council launched a consultation on revising its Foreign Account Tax Compliance Act (FATCA) agreement with the United States. The new proposal would shift Switzerland’s current arrangement to a reciprocal model, where both countries exchange financial account information automatically, rather than Switzerland providing data unilaterally to the US.
Since 2014, Switzerland has adhered to FATCA Model 2, where Swiss financial institutions report information directly to the US tax authority with the consent of US clients. Under this system, no information was exchanged from the US to Switzerland. However, the new proposal aims to implement a Model 1 approach, which allows for automatic exchange of financial account data between the two countries.
This change comes after Switzerland entered into negotiations with the US in 2024, resulting in a new FATCA agreement. Under the new framework, Swiss institutions will report to the Federal Tax Administration, which will then transmit the data to the IRS.
The consultation on this model shift will run until 14 June 2025. If approved, the new FATCA agreement is expected to come into effect on 1 January 2027, following necessary legal amendments by the Federal Assembly.
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