The U.S. Department of the Treasury has announced the signing of a bilateral agreement with the government of Switzerland to facilitate implementation of the information reporting and withholding tax provisions of the Foreign Account Tax Compliance Act (FATCA). “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 S. 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.” The intergovernmental agreement (IGA) with Switzerland is a Model 2 FATCA agreement. Under Model 2, Swiss financial institutions will report information about their U.S. account owners to the U.S. Internal Revenue Service with the consent of the account holder, or where account holders do not give consent, information will be made available in response to group requests through mutual administrative assistance channels provided for in the income tax treaty between the U.S. and Switzerland. The U.S. Treasury department also announced that an IGA for FATCA implementation with Italy was initialed on January 24 and will be signed soon. Treasury still reports that it is engaged with about 50 other countries and jurisdictions concerning mutual agreements to curtail offshore tax evasion.
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