Regulation Switzerland
FATCA in Switzerland: what family offices need to know
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Deutsche Fassung
Short answer
FATCA requires foreign financial institutions to report accounts of US persons to the US tax authority, the IRS. Switzerland has applied FATCA since 2014 under Model 2: Swiss financial institutions report directly to the IRS with the client's consent. In 2024 a Model 1 agreement was signed, under which reporting will run through the Swiss Federal Tax Administration. Family offices must classify their structures and know any US links.
The current Model 2
The Model 2 FATCA agreement between Switzerland and the United States has been in force since 2014, implemented by the FATCA Act. Swiss financial institutions register with the IRS, identify US accounts and report them directly with the account holders' consent. Without consent, accounts are reported in aggregate form; the IRS can then request administrative assistance through a group request.
Planned move to Model 1
Switzerland and the United States signed a new Model 1 agreement on 27 June 2024. Under it, Swiss financial institutions report to the Federal Tax Administration, which forwards the data to the IRS – as with the automatic exchange of information. Parliament decides on the necessary changes to Swiss law; according to the SIF schedule, the change of model is to enter into force on 1 January 2027. Group requests will then no longer be needed. For family offices the reporting channel changes, while the classification of structures remains central.
Who FATCA affects
- US citizens, including those resident in Switzerland with no other link to the United States.
- Holders of a green card or persons taxable in the United States because of their presence.
- Companies, foundations and trusts with US persons as controlling persons.
- Structures that are themselves financial institutions, such as professionally managed investment entities.
Classifying structures
Every company, foundation and trust needs a FATCA classification. A structure that earns mainly investment income and is managed by a financial institution can itself be a financial institution (investment entity) and must register or use an exemption. Other structures are passive or active non-financial entities; for passive ones, US persons among the controlling persons are reported. The classification is declared to banks on Form W-8BEN-E or a self-certification.
Approach in the family office
- Record the US links of all family members: citizenship, green card, presence.
- Classify every structure consistently for FATCA and CRS.
- Keep self-certifications and W-8 forms current at every bank.
- Clarify personal US tax obligations of US persons with specialists.
- Update immediately after changes such as naturalisation or relocation.
In FLIORE
FLIORE keeps tax residences with TIN for every person and the classification for every structure. The AEOI/CRS pre-check shows missing data; the same data forms the basis for FATCA self-certifications to banks.
At a glance
| In force | Since 2014 (Model 2) |
|---|---|
| Reporting today | Directly to the IRS with the client's consent |
| In future | Model 1 via the Federal Tax Administration, signed 2024, planned for 2027 |
Frequently asked questions
Is a single family office a financial institution under FATCA?
That depends on its activity. A family office managing assets for third parties may be a financial institution. A pure service company for one family is often a non-financial entity. The classification should be checked and documented.
What are "accidental Americans"?
People who are US citizens by birth in the United States or through a US parent without ever having lived there. They are US persons and affected by FATCA.
Does FATCA apply in addition to AEOI?
Yes. The United States does not take part in AEOI under the OECD standard; FATCA is a separate regime. Structures must be classified for both.
What if a US person refuses consent?
Under Model 2 the account is reported in aggregate form and the IRS can request assistance through a group request. Banks often restrict such relationships.
Sources
- State Secretariat for International Finance (SIF) – FATCA
- Swiss Federal Tax Administration (ESTV) – FATCA
- IRS – Foreign Account Tax Compliance Act (FATCA)
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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