Advancing a U.S. crackdown on tax evasion by Americans, the U.S. Treasury Department said on Thursday Switzerland and the United States have signed a pact to make Swiss banks disclose more information about U.S. account holders.
The agreement is the latest in a series between the United States and other countries designed to carry out the Foreign Account Tax Compliance Act, or FATCA, enacted in 2010.
The law requires foreign financial institutions to tell the U.S. Internal Revenue Service about Americans' offshore accounts worth more than $50,000. FATCA was enacted after a Swiss bank scandal showed U.S. taxpayers hid millions of dollars overseas.
"Today's announcement marks a significant step forward in our efforts to work collaboratively to combat offshore tax evasion," said Acting Secretary of the Treasury Neal Wolin.
"We are pleased that Switzerland has signed a bilateral agreement with us, and we look forward to quickly concluding agreements based on this model with other jurisdictions," he said in a statement from Treasury, which oversees the IRS.
FATCA imposes steep penalties beginning in 2014 on financial institutions that do not comply with the its demands. Banks and other financial institutions failing to comply with the law would be frozen out of U.S. financial markets.
The Swiss Bankers Association said on Thursday it welcomes the FATCA deal but remains critical of compliance burdens and administrative burdens of the U.S. law.