Switzerland, US Agree FATCA Exemption Clause

01-04-2016

Switzerland and the US have agreed a new Foreign Account Tax Compliance Act (FATCA) exemption clause for accounts held by lawyers or notaries.

 Under the clause, inserted into the Swiss-US FATCA Agreement, accounts maintained for specific purposes by lawyers or notaries for their clients (i.e. accounts held in connection with certain activities protected by law) will be excluded from the scope of the application of FATCA. The financial institution maintaining the account will not be required to identify the clients concerned, providing the lawyers or notaries confirm in writing that the accounts come under the scope of the exemption clause.

According to the Swiss Federal Council, this will ensure that the professional confidentiality of lawyers and notaries will be maintained under Swiss law. The Swiss Bankers Association will amend the relevant documentation processes to enable banks to implement the new clause.

Negotiations toward a new FATCA agreement are ongoing. Unlike the current deal, the new agreement will provide for the automatic exchange of information between tax authorities.

Source:  Tax-News.com