Senate approves FATCA legislation

Finance Minister Eveline Widmer-Schlumpf had to campaign hard for the legislation Keystone

The way is now practically clear for Swiss banks to provide information about United States clients to the US tax authorities, after the Swiss Senate approved the legislation known as the Foreign Account Tax Compliance Act (FATCA) on Monday.

The House of Representatives voted in favour of the legislation earlier this month and it can now only be thwarted if it is rejected in a referendum by the Swiss people as a whole.

The deal is designed to put an end to the tax dispute between the two countries, but it will only apply to future accounts held by US citizens in Swiss banks.

A number of Swiss banks still face legal action in the US over accounts opened in the past by wealthy US citizens suspected of trying to hide their wealth from the tax authorities.

The Senate had given its initial approval to the bill in June, but had to vote again in order to review a technical detail. Monday’s vote was thus considered to be a formality.
 
The FATCA bill will be implemented in stages starting in July 2014. That is later than previously planned, mainly because the US needs more time.