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Switzerland in the age of automatic exchange of banking information

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Re: Switzerland in the age of automatic exchange of banking information

#21

Post by Erlich_Bachman »

nradov wrote: post #18
dbrgn wrote: post #9

To me as a Swiss citizen, born in Switzerland, living in Switzerland, it's an impertinence that every time I open a bank account with a Swiss bank I have to fill out at least 1 form with information about my relation to the US, about my travels in the US and whether I might have to pay taxes there. As a side note, the only other country besides the US that collects taxes based on citizenship and not based on residenc…

Swiss banks are in that position today because some of them engaged in criminal conspiracies to help US customers commit tax fraud. If they want to participate in the US financial system then they have to play by US rules. US citizens residing in other countries can still receive some services and protection from the US federal government. So it's completely fair to tax them for that. We can argue about the value of…

Every single bank in every country that wishes to use USD is in that position today, it is not related to whether they were shown to help in some criminal activity.

> US citizens residing in other countries can still receive some services and protection from the US federal government.

Seriously, like what? In how many percent of situations does this ever come up. Sure it's more than >0, but if it is like 1$/person does it really make sense? This is economic bullying by a country that right now happens to be in a position (having strong military, influence and their currency being the reserve one) to be able to get away with it.

Re: Switzerland in the age of automatic exchange of banking information

#22

Post by novok »

magduf wrote: post #20
teunispeters wrote: post #7

Earlier quoted context omitted.

From following the Vancouver/BC/Canada real estate market, this is very common and normal. (related : Vancouver BC reaching third most expensive city in the world status a couple of years back, for reasons that have little or nothing to do with local populations) The closest I can get to sources though: https://www.cbc.ca/news/canada/british-columbia/laundered-mo... https://www.cbc.ca/radio/podcasts/current-affairs-i…

>related : Vancouver BC reaching third most expensive city in the world status a couple of years back, for reasons that have little or nothing to do with local populations What is it due to? I imagine ease of access to Chinese people who want a place to park their savings, plus nice weather, are the biggest factors. After all, all those wealthy Chinese people could just go to another city, like Edmonton, but they don…

- Accessibility to flights

- A large chinese community already being there, seeded by the HK hand over to china. The HK wave did not cause a real estate crisis.

- Being known as a "good investment" in China.

- RE firms that market in china for vancouver.

- Most importantly of all, bad enforcement of money laundering and foreign income laws compared to the USA.

If money laundering and tax laws were enforced as badly as Canada in the USA, I bet many of these chinese would be in the USA. The pacific north west is not considered a good place weather wise in the USA.

Re: Switzerland in the age of automatic exchange of banking information

#23

Post by captainpiggies »

nradov wrote: post #18
dbrgn wrote: post #9

To me as a Swiss citizen, born in Switzerland, living in Switzerland, it's an impertinence that every time I open a bank account with a Swiss bank I have to fill out at least 1 form with information about my relation to the US, about my travels in the US and whether I might have to pay taxes there. As a side note, the only other country besides the US that collects taxes based on citizenship and not based on residenc…

Swiss banks are in that position today because some of them engaged in criminal conspiracies to help US customers commit tax fraud. If they want to participate in the US financial system then they have to play by US rules. US citizens residing in other countries can still receive some services and protection from the US federal government. So it's completely fair to tax them for that. We can argue about the value of…

Swiss banking history and the process they and their US customers have to go through are entirely unrelated. The US simply created these regulations because for some strange reason the US believes it somehow has the authority to collect every last penny on every single citizen regardless of residence and or if that person gets any value out of having said citizenship. Something the rest of the world obviously doesn’t agree with.

Re: Switzerland in the age of automatic exchange of banking information

#24

Post by rolltiide »

nradov wrote: post #18
dbrgn wrote: post #9

To me as a Swiss citizen, born in Switzerland, living in Switzerland, it's an impertinence that every time I open a bank account with a Swiss bank I have to fill out at least 1 form with information about my relation to the US, about my travels in the US and whether I might have to pay taxes there. As a side note, the only other country besides the US that collects taxes based on citizenship and not based on residenc…

Swiss banks are in that position today because some of them engaged in criminal conspiracies to help US customers commit tax fraud. If they want to participate in the US financial system then they have to play by US rules. US citizens residing in other countries can still receive some services and protection from the US federal government. So it's completely fair to tax them for that. We can argue about the value of…

> Swiss banks are in that position today because

uh no.

Every bank around the world is in that position today because of the FATCA treaty.

Re: Switzerland in the age of automatic exchange of banking information

#25

Post by kube-system »

Erlich_Bachman wrote: post #21
nradov wrote: post #18

Earlier quoted context omitted.

Swiss banks are in that position today because some of them engaged in criminal conspiracies to help US customers commit tax fraud. If they want to participate in the US financial system then they have to play by US rules. US citizens residing in other countries can still receive some services and protection from the US federal government. So it's completely fair to tax them for that. We can argue about the value of…

Every single bank in every country that wishes to use USD is in that position today, it is not related to whether they were shown to help in some criminal activity. > US citizens residing in other countries can still receive some services and protection from the US federal government. Seriously, like what? In how many percent of situations does this ever come up. Sure it's more than >0, but if it is like 1$/person do…

The most obvious is something like state department emergency assistance, but there's plenty of US government programs without a residency requirement.

For example: federal student aid doesn't require US residency.

https://studentaid.ed.gov/sa/types/international

Also, the taxes that the US imposes on citizens overseas has some pretty significant exceptions. US citizens can deduct over $100,000 worth of their foreign-earned income and part of their housing expenses.

Re: Switzerland in the age of automatic exchange of banking information

#26

Post by rolltiide »

lawl wrote: post #12
kmonsen wrote: post #6

Swiss banks doesn't actually disclose to swiss authorities, even though the have a wealth tax based partially on the money in your bank account.

> Swiss banks doesn't actually disclose to swiss authorities, even though the have a wealth tax based partially on the money in your bank account. (i'm swiss) I believe there is no way in hell they could have passed this legislation if it included giving data of swiss citizens to the swiss government. People here cherish their banking secrecy and it's still somewhat part of the national identity. From a swiss point o…

> From a swiss point of view it was/is pretty much: The US is pressuring us too much, we'll have to give up banking secrecy, but only for foreigners.

Exactly, this is also what neighboring Austria did a few years ago.

It is nice that Switzerland takes the attention for "banking secrecy" because other countries that have it in law get to fly under the radar.

As always, people that have better reading comprehension skills get their advantage.

Re: Switzerland in the age of automatic exchange of banking information

#27

Post by captainpiggies »

88840-8855 wrote: post #5

I am no expert, it would be great to read it from someone with knowledge in this field. What if a shell corp is created in a country that is not included in the list of the ownership info automatic exchange? Instead of option A, someone could go with option B and would be fully protected: Option A: Owner in the UK -> Swiss Bank account Option B: Owner in the UK -> Shell corp & legal entity in a country not included i…

Very broadly speaking this is what KYC (know your customer) regulation is for which not only deals with the party in business with the financial institutions but also more importantly with the beneficiary of whatever entity this is. So in your example the bank would be under the obligation to ask prior to establishing any business relationship with the shell corporation where does the money come from and where do any gains etc. go to.

However if the controller does not do his or her job properly or gets coerced by either the client or the asset manager to enter false or incomplete information this regulation is obviously not very effective and requires regular auditing by the authority (in the case of Switzerland FINMA which is the equivalent of the FTC)

There are much better and most importantly legal ways to “optimize taxes” than a simple shell corp. Some of these “corporate constructs” or however you want to call it use loopholes “double Irish with a dutch sandwich” is one of the most notorious ones.

Re: Switzerland in the age of automatic exchange of banking information

#28

Post by colechristensen »

Erlich_Bachman wrote: post #21
nradov wrote: post #18

Earlier quoted context omitted.

Swiss banks are in that position today because some of them engaged in criminal conspiracies to help US customers commit tax fraud. If they want to participate in the US financial system then they have to play by US rules. US citizens residing in other countries can still receive some services and protection from the US federal government. So it's completely fair to tax them for that. We can argue about the value of…

Every single bank in every country that wishes to use USD is in that position today, it is not related to whether they were shown to help in some criminal activity. > US citizens residing in other countries can still receive some services and protection from the US federal government. Seriously, like what? In how many percent of situations does this ever come up. Sure it's more than >0, but if it is like 1$/person do…

For starters the first $103,900 is tax free if you qualify and are living abroad.

What it comes down to is that because of its size and economic power there is an enormous incentive for wealthy people who earn their income (in an actual sense, not a tax law menagerie sense) in the US to try to avoid US taxes by living abroad and moving assets, their "home", etc outside of US jurisdiction while still in reality earning their income from the US.

One of the basic benefits is always being able to return to the US. Being inside American borders is very much safer than being anywhere else if/when the next major global military issue arises.

You also get the benefits of the US legal system if you maintain ties, investments, etc.

If you don't want to pay those taxes you are welcome to renounce your citizenship, but you have to get another country to accept you first. (they won't revoke your citizenship if the result is your being stateless)

Re: Switzerland in the age of automatic exchange of banking information

#29

Post by colechristensen »

captainpiggies wrote: post #23
nradov wrote: post #18

Earlier quoted context omitted.

Swiss banks are in that position today because some of them engaged in criminal conspiracies to help US customers commit tax fraud. If they want to participate in the US financial system then they have to play by US rules. US citizens residing in other countries can still receive some services and protection from the US federal government. So it's completely fair to tax them for that. We can argue about the value of…

Swiss banking history and the process they and their US customers have to go through are entirely unrelated. The US simply created these regulations because for some strange reason the US believes it somehow has the authority to collect every last penny on every single citizen regardless of residence and or if that person gets any value out of having said citizenship. Something the rest of the world obviously doesn’t…

Swiss banks were doing business in the US, setting up offices in the US, and literally counseling American clients on how to export their assets. These were Americans living in America doing business with Swiss banks on American soil in order to avoid taxes.

Several banks have been stomped on for this behavior, the "oldest bank in the world" closed as a result and there have been many other actions.

If you don't want to deal with American taxes, renounce your citizenship, or earn less than $100k abroad.

Re: Switzerland in the age of automatic exchange of banking information

#30

Post by rolltiide »

Don't worry, Switzerland is still attractive for many reasons as a stable, competitive, well connected financial center.

I think a lot of people don't realize that bank account privacy is just 1 of 20 distinctive qualities of Swiss institutions and regulatory structure.

Switzerland is attractive because its not just shell companies and PO boxes, compared to other nations that try to offer similar nominal regulations. Instead it has a vibrant regulatory system with competition amongst each state and no expensive federal government. As an example Google pays the same as it does in Silicon Valley, with employees being only subject state level tax. The state of Zug is a fintech hub with an income tax rate of 7%. Territorial only. The Swiss franc is currently pegged 1:1 with USD, having ditched Euro peg almost 5 years ago.

The regulators and public sector representatives are very accessible because everything happens at the sparsely populated state level, and they all operate under the swiss brand which includes access to the global financial system.

Switzerland is better thought of as a loose collection of sovereign states with a small national government. The concept may seem familiar but recognize how small all of Switzerland is and that has factored into why the national government never grew arbitrarily large to maintain cohesion and assume its own intrusive identity, and why direct representation has been possible there for almost 200 years (they did represenative democracy before that, like the US, but figured out how to remove it since the flaws were obvious and they're smaller)

Outside of finance and regulatory structure, Americans may also find the vibrant gun culture and visible military to be refreshing and familiar. A stark contrast to the ideals and vocal opinions that neighboring Europeans would have about guns as soon as they find out you're American, possibly unaware of what Switzerland offers and has offered for a very long time.

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