Switzerland, U.S. sign pact on fighting offshore tax evasion

WASHINGTON Thu Feb 14, 2013 11:27am EST

WASHINGTON Feb 14 (Reuters) - Advancing a U.S. crackdown on tax evasion by Americans, the U.S. Treasury Department said on Thursday Switzerland and the United States have signed a pact to make Swiss banks disclose more information about U.S. account holders.

The agreement is the latest in a series between the United States and other countries designed to carry out the Foreign Account Tax Compliance Act, or FATCA, enacted in 2010.

The law requires foreign financial institutions to tell the U.S. Internal Revenue Service about Americans' offshore accounts worth more than $50,000. FATCA was enacted after a Swiss bank scandal showed U.S. taxpayers hid millions of dollars overseas.

"Today's announcement marks a significant step forward in our efforts to work collaboratively to combat offshore tax evasion," said Acting Secretary of the Treasury Neal Wolin.

"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," he said in a statement from Treasury, which oversees the IRS.

FATCA imposes steep penalties beginning in 2014 on financial institutions that do not comply with the its demands. Banks and other financial institutions failing to comply with the law would be frozen out of U.S. financial markets.

The Swiss Bankers Association said on Thursday it welcomes the FATCA deal but remains critical of compliance burdens and administrative burdens of the U.S. law.

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Comments (1)
I only can applaud this agreement that will close the possibility of Americans in the mainland having secret bank accounts in foreign countries in order to avoid paying US taxes.
However, Americans Living and Working Abroad are a different bread and should be treated the same way: one size fits all. After living and working in the USA for 30 years, I am back to my country of origin as a dual citizen. I am not hiding anything yet my life has become a nightmare when trying to comply with the demands of the IRS and the Treasury. I am also afraid that the local banks where I live will not accept me as a client because of FATCA.

Feb 14, 2013 1:50pm EST  --  Report as abuse
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