The Swish Federal Council opened a consultation on 7 March 2025 regarding a new FATCA agreement. In the future, Switzerland will no longer only provide financial account information to the US but will also receive information from the US as part of an automatic exchange of information.

The consultation will run until 14 June 2025.

The Foreign Account Tax Compliance Act (FATCA) is a US regulation that has been in force since 1 January 2014 and affects countries worldwide. It requires financial institutions outside the US to either report information on US accounts to US tax authorities or withhold tax. FATCA is implemented bilaterally through agreements between the US and other countries.

Switzerland’s current FATCA agreement with the US, in force since 2 June 2014, follows the Model 2 approach. Under this model, Swiss financial institutions report account data directly to the US tax authorities, provided the US clients concerned have given their consent. For clients who do not consent, the US must request the data through the standard administrative assistance process. However, the US does not provide Switzerland with any reciprocal account data.

In October 2014, the Federal Council decided to introduce an automatic exchange of information in tax matters based on a multilateral agreement developed by the OECD. As the US is not part of this agreement, the Federal Council mandated the Federal Department of Finance to negotiate a transition from Model 2 to Model 1. Under Model 1, tax authorities in both countries automatically exchange account data.

On 27 June 2024, following negotiations, Switzerland and the US signed a new FATCA agreement in Bern. This will allow Switzerland to receive US account data for the first time. Swiss financial institutions will no longer report directly to US authorities but will instead provide the required data to the Swiss Federal Tax Administration (FTA), which will then forward it to the US tax authorities.

The implementation of the new FATCA agreement requires changes to Swiss national law, which will be decided by the Swiss Parliament. According to the current timeline, the transition to Model 1 is expected to take effect on 1 January 2027.