The Foreign Account Tax Compliance Act (FATCA) is a US law that aims to ensure that US taxpayers pay their US taxes.
The Foreign Account Tax Compliance Act (FATCA) is a US law that aims to ensure that US taxpayers pay their US taxes (“US persons”). In order to be able to enforce FATCA, the US tax authority’s Internal Revenue Service (IRS), has entered into agreements worldwide with all financial institutions, including PostFinance Ltd. In these agreements, the financial institutions undertake to report all US taxpayer customers to the IRS.
US taxpayer customers who have accounts and custody account holdings with PostFinance Ltd are affected by FATCA. US taxpayers include:
- US nationals including those with dual nationality
- Persons who live or are domiciled in the US
- Persons who are based in the USA, namely if they either have a permanent resident’s permit (“Green Card”) under US immigration law or have their primary residence according to the “Substantial Presence Test” in the USA (the detailed calculation procedures can be found on the IRS website)
- Companies that are based in the USA
Affected customers will be asked by PostFinance Ltd whether the information to be reported pursuant to FATCA (name, US tax number, account and custody account numbers, account balance and holdings, asset inflows and outflows) may be passed to the IRS.
Even companies not based in the USA may be affected by FATCA. If US taxpayers control a non-US non-operational company, the company shall also be asked by PostFinance Ltd whether the information to be reported pursuant to FATCA concerning the US taxpayers controlling the company may be passed to the IRS. In particular, this also concerns Swiss-based business customers of PostFinance Ltd in which US taxpayers hold an equity interest.
PostFinance must treat the customers concerned as a US person and their account will be considered an account of a non-consenting client. PostFinance will have to report the number and total value of the assets in all accounts of non-consenting clients to the IRS each year by the end of January of the following year. The data of the affected clients will not be disclosed. Based on this information, the IRS may request that the data of these clients be released through administrative assistance in the form of a group request.
As a general rule, PostFinance Ltd does not transfer any data to third parties based on FATCA without the permission of the affected customers. The customer must therefore give his or her written consent to PostFinance Ltd for the data to be forwarded to the IRS.
More information on FATCA is available from specialist tax advisors or on the IRS website.
The information stated is not intended to be and cannot be a substitute for obtaining professional advice as the basis for making decisions or taking action.