The Swiss Federal Council has recently adopted a report on the compatibility of the Swiss/US Qualified Intermediary Agreement (QIA) with bank client confidentiality.
According to the Swiss Federal Department of Finance, the Federal Council stated that banking secrecy would not be violated by the Swiss banks' agreement with the United States, due to the various options that exist.
On May 30, 2010, in their report on the disclosure of UBS client data, the Control Committees of the National Council and Council of States instructed the Federal Council to clarify questions on the application of article 271 of the Criminal Code (SCC) and on the compatibility of the QIA with Swiss banking secrecy.
This request was prompted by the general authorization by the FDF for those persons dealing with the application of the QIA, namely employees of banks and securities dealers, to carry out withholding tax deductions, in particular, based on US law.
According to the current qualified intermediary system, non-US persons do not have to disclose their identity to the IRS, whereas since January 1, 2001, US persons have been allowed to hold US securities only if they were prepared to sign a 'W-9' form.
The information on the form allows the qualified intermediary (QI) to disclose income earned on the securities to the IRS and thereby disclose the identity of the US person. The QI had to obtain the approval of clients to disclose their identity or obtain their consent that no US securities were being held for them..
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