Switzerland has recently become one of the most active countries with respect to expanding its network of automatic exchange of information agreements (Swiss AEOI Agreements). In fact, since January 1, 2017, nine Swiss AEOI Agreements entered into force.
Nine Swiss AEOI Agreements
All of the Swiss AEOI Agreements were signed via exchange of notes in late 2016 and entered into force from January 1, 2017. All of the Swiss AEOI Agreements were signed based on the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Protocol 10) in accordance with OECD CRS (common reporting standard). OECD CRS is the OECD version of FATCA.
Let’s list out the countries with which Swiss AEOI Agreements were signed in late 2016. They can be divided into two groups: the October Group and the December group.
The October Group includes Guernsey, Iceland, Isle of Man, Jersey, Norway and South Korea. All of the agreements were signed via an exchange of notes dated October 26, 2016 and October 28 (Iceland), November 1 (Jersey), November 10 (Guernsey), November 16 (South Korea), December 5 (Isle of Man) and December 13 (Norway).
The December Group includes Japan-Switzerland agreement signed via exchange of notes on December 8, 2016; Australia-Switzerland agreement that was signed via an exchange of notes dated December 8, 2016, and December 14, 2016; and Canada-Switzerland AEOI that was signed via an exchange of notes dated December 9, 2016, and December 22, 2016.
Indirect Impact of Swiss AEOI Agreements on US Taxpayers
This expansion of the information exchange network through Swiss AEOI Agreements poses an additional danger of the IRS detection of tax noncompliance by US taxpayers.
Why? The answer is simple – each of the countries that signed Swiss AEOI Agreements must also comply with its FATCA obligations with respect to US taxpayers. As the information exchange traffic increases through Swiss AEOI Agreements, there is a higher probability that FATCA-related information may be accidentally uncovered and transmitted to one of the Parties to the Swiss AEOI Agreements. Then, this Party may turn over this information to the IRS through FATCA reporting or an automatic exchange of information agreement with the IRS (present or future).
Therefore, US taxpayers with undisclosed foreign accounts in Australia, Canada, Guernsey, Iceland, the Isle of Man, Japan, Jersey, Norway, South Korea and Switzerland are at an increased risk of the IRS detection and should immediately consult with an experienced international tax law firm with respect to their voluntary disclosure options.
Contact Sherayzen Law Office for Professional Help With Offshore Voluntary Disclosures Concerning Foreign Assets and Foreign Income
If you have undisclosed foreign assets or foreign income, you should contact Sherayzen Law Office as soon as possible. Sherayzen Law Office is a highly experienced international tax law firm that has helped hundreds of US taxpayers around the world to bring their tax affairs into full compliance with US tax laws, while reducing their noncompliance penalties and even lowering their tax liabilities (by utilizing missed opportunities for tax optimization in the years covered by voluntary disclosure). We can help You!