The new FATCA agreement between Switzerland and the USA was signed on June 27, 2024, in Bern, according to a statement from the State Secretariat for International Financial Matters (SIF) on Thursday.

Starting from 2027, the flow of data will be bidirectional. Currently, Switzerland unilaterally provides information on financial accounts to the USA. In the future, it will also receive corresponding information from the USA through automatic exchange of information.

FATCA came into effect in 2014, requiring foreign financial institutions to provide US tax authorities with information about US accounts or face withholding taxes.

Mutual Automatic Exchange

Switzerland currently operates under the «Model 2,» where account data from Swiss financial institutions are transmitted directly to US tax authorities with the consent of US clients. If consent is not provided, the US must request this information through regular administrative assistance procedures. Conversely, no account data flows from the USA to Switzerland.

Under the newly agreed «Model 1,» tax authorities of both countries will automatically exchange information about account data, as stated further.

Implementing the FATCA agreement requires adjustments to national law. The Swiss Federal Council will decide on this matter. According to current plans, Switzerland's transition to Model 1 is scheduled to take effect on January 1, 2027, as outlined by the SIF.