The simplifications apply in particular to social security, private retirement funds and casualty and property insurances, which are exempt from FATCA, as well as to the due diligence requirements of financial institutions.
According to the Swiss Federal Department of Finance the following exemptions apply:
- Social Security, private retirement funds as well as casualty and property insurances are exempt from the application of FATCA
- Collective investment vehicles as well as financial institutions with a predominantly local clientele are deemed, under certain requirements, to be FATCA-compliant and are subject only to a registration obligation
- The due diligence obligations on the identification of US clients to which the rest of the Swiss financial institutions are subject are created in such a way that they can reduce the administrative burden
Matthäus Den Otter, CEO of the Swiss Funds Association (SFA) said: “We welcome the greater legal certainty in an area that is important for the entire financial sector. We are pleased to note that the workload in implementing FATCA will be reduced for the financial institutions involved.”
In mid-2012, Switzerland and the US published a joint statement setting out a framework for possible simplifications in the implementation of FATCA.
The agreement, which will get the final seal of government approval in January 2013, would reconcile Swiss secrecy rules with US disclosure demands.
In September, the UK became the first country to sign a bilateral FATCA agreement with the US whereby registered pension schemes and tax-advantaged ISA savings products will be exempted from the new reporting requirements, due to be implemented in 2014.
