Switzerland has postponed the move from Model 2 to a reciprocal Model 1 FATCA agreement with the US, now set to take effect on 1 January 2028. Transitional arrangements have been agreed to ensure a smooth implementation.
Switzerland’s transition to a Foreign Account Tax Compliance Act (FATCA) Model 1 agreement with the United States is now expected to take effect on 1 January 2028, one year later than previously anticipated, the State Secretariat for International Finance (SIF) announced on 26 January 2026.
The Switzerland-US FATCA agreement, which entered into force in 2014, was initially implemented under Model 2. Under this system, Swiss financial institutions report US account details directly to the US Internal Revenue Service (IRS), with US client consent.
On 27 June 2024, Switzerland and the US signed a Model 1 FATCA agreement. Unlike Model 2, Model 1 provides for automatic, reciprocal exchange of information between the competent authorities, thereby removing the need for Swiss institutions to report directly to the IRS.
The SIF said special transitional provisions have been negotiated to ensure continuity between Model 2 and Model 1, allowing a smooth changeover. The FATCA Qualification Committee, led by SIF and including the Federal Tax Administration, Federal Social Insurance Office, and key financial associations, will oversee implementation and resolve any issues arising under the agreement, consulting US authorities when required.
FATCA, a US regulation applied globally, requires foreign financial institutions to report information on US accounts or face high taxes. The bilateral agreement aims to reduce the administrative and financial burden on Swiss institutions while maintaining compliance with US law.
