Switzerland and the U.S. Department of the Treasury have signed a bilateral agreement to share tax information and facilitate the implementation of the Foreign Account Tax Compliance Act (FATCA). Included as part of the HIRE Act of 2010, FATCA seeks to prevent U.S. taxpayers from evading taxes through offshore accounts.
In a February 14, 2013 press release, Acting Secretary of the Treasury Neal S. Wolin said, “Today’s announcement marks a significant step forward in our efforts to work collaboratively to combat offshore tax evasion. We are pleased that Switzerland has signed a bilateral agreement with us, and we look forward to quickly concluding agreements based on this model with other jurisdictions.”
The bilateral agreement with Switzerland is the first based on the model published in November of 2012 – the second of two model agreements – and marks another important step in establishing a common approach to combatting tax evasion.
The Treasury has signed bilateral agreements with a number of countries so far to share information with their tax authorities, including the United Kingdom, Denmark, Mexico, Ireland and Switzerland and one with Italy was initialed in January 2013. The Treasury is currently in talks with more than 50 countries and jurisdictions to curtail offshore tax evasion, and more signed agreements are expected to follow in the near future.
The bilateral agreement comes as the Internal Revenue Service (IRS) and U.S. Department of Justice are continuing to investigate Swiss banks, including UBS, Credit Suisse, Wegelin and Julius Baer, for helping wealthy Americans avoid paying taxes on offshore accounts.
Treasury Department Press Release
IRS Foreign Account Tax Compliance Act (FATCA) Web Page
Department of Justice Offshore Compliance Initiative
Boston Tax Attorney Blog Post Treasury and IRS Announce New Timelines for FATCA