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Yes, Switzerland is transitioning from a Model 2 to a Model 1 Intergovernmental Agreement (IGA) for implementing FATCA (Foreign Account Tax Compliance Act) with the United States. This change represents a fundamental shift in how financial information will be exchanged .
The new agreement was signed on June 27, 2024. While it was initially planned to take effect on January 1, 2027, the Swiss State Secretariat for International Finance (SIF) announced on January 26, 2026, that the go-live date has been postponed. The new system is now expected to enter into force on January 1, 2028, giving financial institutions and authorities additional time to prepare.
What This Means for Financial Institutions and Account Holders
The transition introduces several key changes and action items for financial institutions and their clients:
1. For Financial Institutions (FIs): They face a period of operational adjustment.
- Registration: FIs must re-register with the IRS as “Reporting Model 1 FIs” (likely keeping their GIIN) and register with the Swiss FTA, even for nil reports .
- Process Updates: Internal systems must be updated for the new reporting channel (Swiss FTA portal instead of IRS IDES) and adapted for mandatory, rather than consent-based, reporting .
- Account Review: Accounts previously classified as “non-consenting” or “recalcitrant” will now be fully reportable, requiring a review and data update, particularly for US TINs (Taxpayer Identification Numbers)
- Wealth Managers: Wealth managers registered with the IRS as “registered deemed compliant” must deregister and certify their status using Form W-8BEN-E .
2. For Account Holders: The experience for US persons in Switzerland will change.
- Notification: Financial institutions will need to notify affected US clients about the new mandatory reporting rules by January 31 of the first exchange year .
- Data Accuracy: Clients have a new duty to inform their financial institution within 30 days of any change in circumstances that affects their FATCA status. Providing incorrect information or failing to report changes could result in penalties of up to CHF 10,000 .
Big question: Will Swiss residents with US accounts will have their information reported to Swiss authorities?
Probably not.
The US has tax agreements with many countries but only categorize 51 as being safe or trusted to provide AEoI. Sure, US will only consider FATCA’s reciprocal automatic exchange of information with countries that have a tax agreement with US. But only a subset of these 94 countries with which the US has an income tax or other convention or bilateral agreement relating to the exchange of tax information are potential candidates for AEOI from the USA . This subset (now at 51 countries) is listed in the often updated Rev Proc 2024-42 which US provides the limited reciprocal FATCA information, i.e. interest on bank deposits paid to nonresident aliens.
(see page 86 of 102 of the pdf, ie page 1436 of the IRS Rev Proc).
So why is Switzerland not on the list of trusted countries to receive data
I cannot find if Rev Prov 2042 has been superseded
The last Rev-Proc dealing with safe countries was published mid December 2024
The relevant IRS Rev-Procs are updated on average every 2 years .
So expect quite a few months before the next Rev-Proc includes Switzerland as a country regarded safe and appropriate to receive info regarding FATCA reciprocity.
