Switzerland FATCA and CRS Compliance for Companies: Model 2 IGA, AEOI and Practical Obligations

Swiss companies and financial institutions operate within two parallel international tax transparency frameworks: FATCA (Foreign Account Tax Compliance Act), which governs obligations toward the United States, and CRS/AEOI (Common Reporting Standard / Automatic Exchange of Information), which governs obligations toward more than 100 other jurisdictions. Switzerland's FATCA regime is unusual in global terms: unlike most countries, Switzerland signed a Model 2 Intergovernmental Agreement (IGA), meaning Swiss financial institutions report US account data directly to the Internal Revenue Service rather than routing it through the Swiss Federal Tax Administration. The CRS framework, enacted through Switzerland's AIA Act (AIA-Gesetz), has applied since 1 January 2017 with first exchanges in 2018. Both frameworks carry real compliance obligations — and real penalties for non-compliance — for Swiss banks, asset managers, collective investment schemes, and for ordinary Swiss AG and GmbH companies that have US beneficial owners or deal with US counterparties.

What FATCA Means for Switzerland: The Model 2 IGA

The United States enacted FATCA in 2010 to address offshore tax evasion by US persons holding assets abroad. FATCA requires foreign financial institutions (FFIs) worldwide to identify US account holders, collect specified account information, and report it to the IRS — or face a 30% withholding tax on US-source payments. To reduce the conflict between FATCA obligations and local banking secrecy laws, the US Treasury developed two IGA models. Under Model 1, FFIs report to their domestic tax authority, which in turn exchanges data with the IRS. Under Model 2, FFIs report directly to the IRS with the account holder's consent.

Switzerland opted for Model 2 in its IGA signed on 14 February 2013, which entered into force on 2 June 2014 (Swiss FATCA Act, SR 672.933.6). The practical consequence is that Swiss banks and other FFIs have registered directly with the IRS on the FATCA portal, obtained a Global Intermediary Identification Number (GIIN), and report US-consenting account holders directly to the IRS annually (using Form 8966 or equivalent). Where a US account holder does not consent to direct reporting, the Swiss FI provides an anonymised, aggregated report to the IRS; the IRS may then request full details via the treaty-based mutual administrative assistance mechanism.

On 27 June 2024, Switzerland and the US signed a new FATCA IGA replacing Model 2 with Model 1. Under the new agreement, reporting will be redirected from the IRS to the Swiss FTA, which will forward data to the IRS on a reciprocal, automatic basis. The transition requires ratification by the Swiss Federal Assembly and enactment of a new Model 1 FATCA Act and Ordinance, for which the consultation procedure concluded in June 2025. According to the State Secretariat for International Finance (SIF), the earliest entry into force is now scheduled for 1 January 2029 (as of July 2026), having slipped from earlier estimates of 2027 and 2028. Until the transition date, all existing Model 2 obligations remain in full force.

CRS and AEOI: Switzerland's Multilateral Reporting Framework

The OECD Common Reporting Standard (CRS) is the multilateral equivalent of FATCA — a global framework for automatic exchange of financial account information between tax authorities. Unlike FATCA, which is a bilateral US requirement, CRS operates through a network of bilateral or multilateral competent authority agreements and applies to residents of all participating jurisdictions, not only US persons.

Switzerland implemented CRS through the Federal Act on the International Automatic Exchange of Information in Tax Matters (AIA Act / AIAG, SR 653.1) and the accompanying AIA Ordinance (AIAO, SR 653.11), both of which entered into force on 1 January 2017. Financial institutions subject to the AIA Act began collecting data from 1 January 2017 and the first exchanges with partner states took place in September 2018. The Swiss Federal Tax Administration (FTA / ESTV) administers AEOI and is Switzerland's competent authority for all CRS exchanges.

As of 2025, Switzerland has concluded AEOI agreements with more than 100 partner jurisdictions, including all EU member states, the UK, the major offshore financial centres (Cayman Islands, Jersey, Guernsey, Isle of Man, BVI, Bermuda), and a growing list of emerging market economies. The network continues to expand: recent additions include Uganda (reciprocal, effective 1 January 2026), Trinidad and Tobago (temporarily non-reciprocal, effective 1 January 2026), and Curaçao (effective 28 November 2025). The State Secretariat for International Finance (SIF) maintains the authoritative current list of Swiss AEOI partner states at sif.admin.ch.

Switzerland is also implementing the CRS 2.0 update (which broadens the scope of reportable assets and introduces new due diligence rules) and the Crypto-Asset Reporting Framework (CARF). The CRS 2.0 enhancements are planned from 1 January 2026. CARF integration has been delayed: on 3 November 2025, the National Council's Economic Affairs and Taxation Committee (WAK-N) suspended deliberations, meaning CARF will be enshrined in Swiss law from 2026 but operational implementation is unlikely before 2027 at the earliest.

Reporting Financial Institutions: Who Is Subject to FATCA and CRS in Switzerland

Both FATCA and CRS apply to financial institutions — not to all Swiss companies. A Swiss AG or GmbH that carries on ordinary commercial activity (manufacturing, consulting, trading goods, providing professional services) is not a financial institution and does not file FATCA or CRS reports. The compliance question for such companies is different: they must correctly classify themselves for FATCA purposes when opening bank accounts or receiving US-source payments, and their banks must classify them for CRS purposes. Reporting obligations fall on the institution holding the account, not the account-holding company itself.

The following categories of Swiss entities are Reporting Financial Institutions (RFIs) under both FATCA and the AIA Act, and are subject to due diligence, self-certification collection, GIIN maintenance, and annual reporting obligations:

• ●Banks and deposit-taking institutions: All Swiss-licensed banks under the Federal Banking Act (BankA) are RFIs. This includes cantonal banks, major commercial banks (UBS, Credit Suisse successor entities, Raiffeisen), private banks, and online-only banks (neobanks) licensed by FINMA.
• ●Securities firms and custodians: Swiss securities firms (Wertpapierhäuser, Art. 41 FinIA) licensed under the Financial Institutions Act (FinIA / FINIG), as well as portfolio managers (Art. 24 FinIA) and fund managers (Art. 32 FinIA) holding financial assets on behalf of clients, are RFIs to the extent of those custody and investment activities.
• ●Insurance companies issuing cash-value products: Swiss life insurers and reinsurers that issue cash-value insurance contracts or annuity contracts are RFIs under both FATCA and CRS. Risk-only term life policies with no cash surrender value are excluded.
• ●Collective investment schemes: Swiss collective investment vehicles — contractual investment funds (Anlagefonds), SICAVs, SICAFs, and limited partnerships for collective investment — are RFIs. This includes FINMA-authorised Swiss funds and non-UCITS alternative funds managed from Switzerland. Under CRS, a collective investment scheme is a Non-Reporting FI only where its interests are held exclusively by non-reporting persons.
• ●Certain holding and treasury companies: A Swiss holding or finance company of a multinational group can be an Investment Entity (and thus an RFI) under FATCA or CRS if its primary activity is investing, administering, or managing financial assets on behalf of others, or if its gross income is primarily from financial assets. Classification depends on the specific facts of each entity.

Non-Reporting Financial Institutions: Exempt Categories Under Swiss Law

Both FATCA and CRS recognise that certain types of financial institutions pose a low risk of being used for offshore tax evasion and provide exemptions — or reduced obligations — for these entities. Switzerland's AIA Act implements a list of Non-Reporting Financial Institutions (NRFIs) that mirrors the CRS standard with Swiss-specific adaptations.

The principal exempt categories under Swiss law include:

An important distinction between CRS and FATCA is that CRS does not include a "small local bank" or "financial institution with a local client base" exemption — categories that exist under FATCA. Under CRS, a Swiss cantonal savings bank or community bank that meets the local client base criteria for FATCA purposes is nonetheless a full Reporting Financial Institution under the AIA Act and must comply with all CRS due diligence and reporting requirements.

GIIN Registration: Requirements for Swiss Financial Institutions

A Global Intermediary Identification Number (GIIN) is a 19-character identifier assigned by the IRS to financial institutions that register under FATCA. Under the current Model 2 IGA, every Swiss Reporting Financial Institution must register on the IRS FATCA Registration Portal (irs.gov/fatca), obtain a GIIN, and ensure its GIIN appears on the published IRS FFI List — a monthly-updated global directory of FATCA-compliant FFIs.

The GIIN serves as the FI's proof of FATCA compliance to withholding agents making US-source payments. A withholding agent (typically a US bank or broker-dealer) must verify the payee's GIIN against the IRS FFI List before applying a reduced (or zero) withholding rate. If a Swiss FI's GIIN is absent from the list — because the FI failed to register, failed to renew, or was removed for non-compliance — the withholding agent is required to apply 30% withholding on US-source payments to that institution.

Registration and maintenance obligations under the current Model 2 framework include:

• ●Initial registration: Complete the IRS FATCA Registration Portal application (Form 8957 equivalent), designating an Responsible Officer (RO) who will certify compliance to the IRS periodically.
• ●Periodic certifications: The RO must file FATCA compliance certifications with the IRS every three years, confirming the FI has implemented required due diligence, reporting, and withholding procedures.
• ●Annual reporting: File Form 8966 (FATCA Report) with the IRS annually, covering reportable accounts of US persons who consented to disclosure. The filing deadline is typically 31 March for the prior calendar year.
• ●Aggregate reporting for non-consenting accounts: Provide anonymised aggregate data to the IRS for US account holders who refused consent. The IRS may then submit a group request for administrative assistance to the FTA under the double tax treaty.
• ●Transition re-registration: Upon the Model 1 transition (expected no earlier than 1 January 2029), Reporting Swiss FIs must re-register as "Reporting Model 1 FIs" on the IRS portal within 20 days of the new IGA's entry into force. A facilitated re-registration process is planned to allow FIs to retain their existing GIIN. At the same time, FIs must register with the FTA, which becomes the new FATCA competent authority on the Swiss side.

Swiss wealth managers and portfolio managers currently classified as "registered deemed compliant" FFIs — who registered with the IRS and obtained a GIIN but do not file annual reports — will lose this status upon the Model 1 transition. They will be reclassified as "certified deemed compliant" and will self-certify their status to withholding agents using Form W-8BEN-E. This means deregistering from the IRS portal and surrendering the GIIN.

W-8BEN-E and W-9: FATCA Classification for Swiss Companies Dealing with US Counterparties

For Swiss AG and GmbH companies that are not financial institutions — the vast majority of Swiss operating companies — FATCA compliance does not mean filing reports with the IRS. It means correctly classifying the entity for FATCA purposes and providing that classification to banks and US counterparties via the relevant IRS certification form.

The two principal forms are:

• ●Form W-8BEN-E (Certificate of Status of Beneficial Owner for US Tax Withholding — Entities): Used by non-US entities. A Swiss AG or GmbH provides W-8BEN-E to its Swiss bank (for CRS/FATCA self-certification at account opening) and to any US counterparty that acts as a withholding agent — for example, a US broker-dealer paying dividends on US securities, a US company paying royalties or interest to the Swiss entity, or a US fund paying distributions. The form certifies the entity's chapter 3 status (foreign person, entitled to treaty benefits) and chapter 4 FATCA status (NFFE classification or, if an FFI, the GIIN).
• ●Form W-9 (Request for Taxpayer Identification Number): Used by US persons. A Swiss AG or GmbH that is US-owned at 100% or is a US tax resident for any reason — for example, if it is treated as a disregarded entity of a US person — may need to provide Form W-9 to US counterparties instead of W-8BEN-E. This is uncommon for Swiss corporations but relevant where the US beneficial owner has made a check-the-box election.

The most consequential FATCA classification question for a Swiss operating company on Form W-8BEN-E is whether the entity is an Active NFFE or a Passive NFFE:

A Swiss AG structured as a pure holding company — receiving dividends from subsidiaries or interest from intercompany loans — will typically be a Passive NFFE. If a US person holds more than 25% of the shares (directly or indirectly), that person's name, address, US TIN (SSN or EIN), and percentage ownership must be disclosed in Part XXIX of the W-8BEN-E. The Swiss bank and any US withholding agent is entitled to rely on the self-certification unless there is reason to know it is inaccurate.

W-8BEN-E forms are generally valid for three calendar years from the year of signing unless a change in circumstances renders any information incorrect. A change that affects FATCA or CRS status — including a change in US beneficial ownership above the 25% threshold, a change in tax residency, or a change in the income profile that shifts the entity from Active to Passive — must be communicated to the bank within 30 days.

Practical Compliance Steps for Swiss AG and GmbH with US Beneficial Owners or US Clients

For a Swiss AG or GmbH that is not a financial institution but has US beneficial owners, US shareholders, or regularly deals with US counterparties, the practical FATCA and CRS compliance checklist covers the following areas:

• ●1. Classify the entity correctly: Determine whether the company is a Financial Institution or an NFFE. Most Swiss operating companies are NFFEs. If the company manages financial assets for third parties — fund management, portfolio management, trust administration — seek specialist advice as FI classification may apply.
• ●2. Determine Active vs Passive NFFE status: Review the prior year's income composition. If more than 50% of gross income is passive (interest, dividends, rents, royalties, annuities) or more than 50% of assets produce passive income, the entity is Passive and must identify its US controlling persons.
• ●3. Collect and file W-8BEN-E at bank account opening: Every Swiss bank will require a completed W-8BEN-E and a CRS self-certification at corporate account opening. Ensure the chapter 4 status box is correctly completed. Swiss banks are authorised to decline account opening — or block an existing account — where documentation is missing or expired.
• ●4. Identify US beneficial owners and obtain their US TINs: If the entity is a Passive NFFE, identify all US controlling persons and obtain their US Taxpayer Identification Numbers. A US citizen or green card holder who is a shareholder may have a Social Security Number (SSN); a US company shareholder will have an EIN. These must appear on the W-8BEN-E.
• ●5. Provide W-8BEN-E to US counterparties: When receiving US-source income — dividends on US securities, interest from US obligors, royalties from US licensees — provide the completed W-8BEN-E to the US withholding agent before the first payment. Without it, the withholding agent must apply 30% backup withholding.
• ●6. Monitor change-in-circumstance triggers: Appoint a compliance responsible person (internally or through a fiduciary) to monitor changes in shareholder structure, income profile, or tax residency that would affect FATCA or CRS classifications. Report changes to the bank within 30 days.
• ●7. Verify FBAR and Form 8938 obligations for US shareholders: US persons who own or control a Swiss company account may have US reporting obligations beyond FATCA — specifically the FinCEN FBAR (Report of Foreign Bank and Financial Accounts) and IRS Form 8938 (Statement of Specified Foreign Financial Assets). These are obligations of the US person, not the Swiss company, but the Swiss company should ensure its US shareholders are aware of them.
• ●8. Review impact of Model 1 transition on FI entities: If the Swiss entity is a financial institution (FI), begin planning for the Model 1 transition. Assess whether re-registration is required, whether GIIN status will change, and whether new FTA registration obligations will apply. The FTA is expected to issue registration guidance ahead of the transition date.

Penalties for Non-Compliance: FATCA and CRS Consequences

The compliance consequences of FATCA and CRS non-compliance differ depending on whether the non-compliant party is a Swiss financial institution or an individual account holder / beneficial owner.

For Swiss Reporting Financial Institutions, the primary FATCA enforcement mechanism is economic rather than penal: a non-compliant Swiss FI that is removed from the IRS FFI List becomes subject to 30% withholding on all US-source payments (FDAP income and, eventually, gross proceeds). This is operationally devastating for any institution that invests in US securities or maintains correspondent banking relationships with US financial institutions. In practice, removal from the FFI List triggers counterparty risk assessments by US correspondent banks, which may terminate relationships independently of the withholding mechanism.

Under Switzerland's domestic FATCA Act, the FTA supervises compliance and can take administrative enforcement measures against Swiss FIs that fail to meet their obligations. The specific Swiss administrative penalties are not published as a fixed schedule — enforcement is case-specific. However, the FTA Act provisions on administrative assistance provide the framework for compelled cooperation and, where applicable, referral to criminal prosecution authorities under the Swiss Tax Penal Law (VStP).

For Swiss AIA/CRS compliance, the AIA Act provides that violations of reporting, due diligence, and registration obligations are subject to administrative sanctions by the FTA, including fines for deliberate or negligent non-compliance. The FTA may also conduct audits of Swiss FIs' AEOI procedures and order remedial action. Where a Swiss FI exchanges incorrect data that materially understates a foreign resident's reportable account balance, the FTA may be required to correct and re-exchange the data with the relevant partner state authority.

For US persons (US citizens, green card holders, and certain US tax residents) holding Swiss accounts, FATCA non-compliance has separate and more severe consequences under US law:

• ●FBAR penalties: FinCEN Form 114 (FBAR) penalties for wilful failure to file reach the greater of USD 100,000 or 50% of the account balance per violation. Non-wilful FBAR violations carry penalties up to USD 10,000 per year.
• ●Form 8938 (FATCA) penalties: The IRS may assess a USD 10,000 penalty for failure to file Form 8938, increasing to USD 50,000 for continued failure after IRS notice. A 40% accuracy-related penalty may apply to underpayments attributable to undisclosed foreign financial assets.
• ●Criminal exposure: Wilful FBAR violations can be prosecuted as criminal offences under 31 USC 5322, carrying potential prison sentences and fines.

The US Department of Justice's Swiss Bank Program, which concluded in 2016, resulted in more than 80 Swiss banks entering non-prosecution agreements and paying over USD 1.3 billion in penalties. That programme is closed, but the framework it established — with Swiss banks reporting historical account data under FATCA and MLAT mechanisms — has materially reduced the practical banking secrecy historically associated with Swiss accounts.

How FATCA, CRS and Swiss Taxes Fit Together

FATCA and CRS do not impose Swiss taxes — they are information-exchange mechanisms that allow foreign tax authorities to verify whether their residents are correctly reporting Swiss-held assets. The actual tax liability of the Swiss company or its shareholders is determined by Swiss corporate tax law and the applicable double tax treaties.

For a Swiss company, the relevant tax compliance framework involves three intersecting layers: Swiss corporate income tax (federal flat rate of 8.5% on profit, cantonal rates varying by canton — Zug at approximately 11.71% combined effective rate); the Swiss withholding tax (Verrechnungssteuer) of 35% on Swiss-source dividends, interest, and lottery winnings — refundable to qualifying residents and treaty-country non-residents; and the FATCA/CRS reporting infrastructure that makes account information available to foreign tax authorities.

A Swiss AG with US shareholders must therefore manage several layers at once: Swiss corporate tax on profits; potential Swiss withholding tax on dividends paid to US shareholders (reduced under the Switzerland–US double tax treaty to 5% for corporate shareholders owning at least 10%, or 15% in other cases); FATCA W-8BEN-E classification obligations; and the US shareholders' personal FBAR and Form 8938 obligations. The interaction of these layers requires coordinated advice that considers both Swiss and US tax implications simultaneously.

For more on the Swiss tax environment, see the guides to Swiss corporate tax and Swiss taxes. For the banking relationship itself, including how Swiss banks conduct FATCA and CRS due diligence at account opening, see the guide to opening a Swiss bank account.

Preparing for the Model 1 Transition: Action Items for Swiss Financial Institutions

The 2024 FATCA Model 1 IGA represents the most significant structural change to Switzerland's FATCA framework since 2014. Although the operative date is not yet confirmed (subject to parliamentary ratification), Swiss FIs should begin preparation well in advance given the system and operational changes required.

Key preparation steps for Swiss Reporting FIs include:

• ●Register with the FTA as a FATCA reporting entity: The FTA will establish a new FATCA registration portal or integrate reporting into the existing AEOI reporting infrastructure. Monitoring FTA guidance at estv.admin.ch is essential.
• ●Plan IRS portal re-registration: The IRS will facilitate a re-registration process for Reporting Model 1 FIs. The 20-day window to complete re-registration after entry into force is tight — preparation must be complete before the transition date.
• ●Review customer consent arrangements: Under Model 1, the consent mechanism for direct IRS reporting is no longer needed. Review existing consent documentation and assess whether consent clauses in account documentation require updating for Model 1 compliance.
• ●Assess systems integration with FTA reporting: FIs that currently prepare Form 8966 XML files for direct IRS submission will need to adapt their compliance systems to the FTA's reporting format and submission channel.
• ●Evaluate reclassification of deemed-compliant wealth managers: Wealth managers currently holding GIINs as registered deemed compliant must plan for deregistration, GIIN surrender, and the move to W-8BEN-E-based self-certification. This has operational implications for US correspondent relationships.

Goldblum & Partner AG has advised international entrepreneurs, holding structures, and Swiss companies from Baarerstrasse 25, 6300 Zug since 2007 on Swiss corporate and tax compliance matters, including FATCA classification, CRS self-certification, and the interaction between Swiss corporate tax obligations and international reporting requirements. Contact us for a consultation on FATCA entity classification, W-8BEN-E preparation, or compliance planning for the Model 1 transition.

Legal and regulatory note: FATCA Model 1 transition dates are subject to Swiss parliamentary ratification and have not been finally confirmed. CRS 2.0 and CARF implementation timelines are subject to change following the WAK-N committee suspension of November 2025. FBAR and Form 8938 penalty figures reflect US law as of the article date and should be verified at irs.gov. Swiss FTA administrative penalty provisions should be verified at estv.admin.ch. This article does not constitute legal or tax advice. Verify all compliance obligations with a qualified Swiss and US tax adviser before acting.