Switzerland Enacts Legislation to Implement FATCA

The Swiss Federal Council approved legislation that will bring the FATCA Act into force on June 30, 2014, the day before FATCA becomes operative in the United States. The FATCA Intergovernmental Agreement ("IGA") between Switzerland and the United States was approved by the Swiss Parliament in September 2013 and came into force on June 2, 2014, upon an exchange of notes between the United States and Switzerland. Parliament also approved legislation to implement FATCA in September 2013.

Switzerland's IGA with the United States is a Model 2 agreement, which means Swiss financial institutions must disclose account information directly to U.S. tax authorities. However, on May 21, 2014, the Federal Council approved a draft mandate for negotiations with the United States on switching to a Model 1 form of IGA, which provides for the automatic exchange of information. It is unclear whether and when such negotiations will occur.

See: Swiss Federal Council's Press Release.See also: Cabinet FATCA Specialty Page.