2025 Year Wrap-up and Outlook

As the well-deserved holiday season approaches, we would like to update our readers on the most recent developments in operational tax and offer an outlook on the regulatory year ahead.

CARF: Postponement of the Entry into Force of the Swiss Implementation Provisions

As mentioned in our previous newsletter, as part of its efforts to enhance global tax transparency, the OECD has introduced the Crypto-Asset Reporting Framework (CARF), thereby establishing new due diligence and reporting obligations for individuals and entities classified as Reporting Crypto-Asset Service Providers (RCASP).

Switzerland initially planned to implement CARF alongside with CRS 2.0 from January 1, 2026. On November 4, 2025, the deliberations on the partner states with which Switzerland intends to exchange data in accordance with the CARF have been suspended. Thus, notwithstanding being a part of the updated CRS legislation effective from January 2026, CARF will not be implemented on 1 January 2026 as planned, but in 2027 at the earliest. Additionally, the Federal Council determined at its meeting of 26 November 2025 that the provisions on crypto assets contained in the AEOIA and the AEOI Ordinance shall not apply in 2026, meaning that not only CARF reporting but also CARF due diligence has been postponed.

This postponement is a welcome relief for affected financial institutions, as it provides additional time to assess whether and to what extent CARF must be implemented. While CARF primarily targets entities acting as counterparties or intermediaries in crypto-asset transactions, "traditional" financial service providers (such as banks, custodians, and brokers) may also fall within the scope of CARF where they enable clients to access crypto-assets and therefore qualify as RCASPs.

In this context, particular attention should be paid to institutions offering no “regular” crypto assets but digitally issued or tokenized financial assets (colloquially known as “dual listed assets” or “crypto bonds”). The OECD has recently clarified that such financial assets are not subject to CARF if, for regulatory or other legal reasons, they can only be held by or transferred through custodial accounts maintained with one or more Depository or Custodial Institutions. This should ease concerns among traditional banks without crypto services that they might fall under the CARF regulations.

Considering these developments, we recommend financial institutions to analyze their product universe to identify any digitally issued or tokenized securities that do not fulfil the above exemption criteria. Where such products are offered, a decision should be taken by the implementation date of CARF either to implement the CARF requirements or to restrict or block client access to these products.

CRS 2.0: Reminder

Notwithstanding the postponement of the entry into force of CARF, the Federal Council approved amendments to the Ordinance on the International Automatic Exchange of Information in Tax Matters (AEOI Ordinance) at its meeting on 26 November 2025. As a result, CRS 2.0 will enter into force on 1 January 2026.

We remind all Reporting FIs to ensure that CARF 2.0 requirements are implemented adequately, namely by focusing on the following:

• Coordinating with the system provider to confirm that all newly required fields are available for CRS-relevant entries.

• Updating written internal policies and procedures to remove outdated information and reflect new regulatory requirements.

• Adjusting account opening process to incorporate enhanced due diligence requirements (especially for persons resident in jurisdictions providing CBI/RBI schemes) and revising the account opening forms, where appropriate.

For further details on CRS 2.0, please refer to our previous newsletter.

FATCA: Change to Model 1 IGA on January 1, 2027

We would like to remind that new, reciprocal Intergovernmental Agreement (IGA) under the Foreign Account Tax Compliance Act (FATCA) between Switzerland and the United States is scheduled to enter into force on 1 January 2027.

As of the date of this publication, no implementation provisions have been issued. As there has been no official announcement regarding a postponement of these changes, we continue to monitor regulatory developments closely and will inform our readers of any further updates through this channel.

For a comparative overview of the key changes and their impact on Swiss financial institutions, please refer to our previous newsletter.

QI: Electronic Filing of Forms 1042 and 1042-S

As we previously informed, the updated prerequisites for electronic filing now require businesses to submit Form 1042 and its attachments electronically via the Modernized e-File Platform (MeF), beginning with the 2024 tax year for U.S. withholding agents and the 2025 tax year for QIs, QDDs and WFPs. The submission of Form 1042 and related documents must be completed using an XML file through the MeF platform. In light of these changes, PQS attained the required status as Electronic Return Originator and Transmitter with the IRS and is now able to file Form 1042 and its attachments electronically via the Modernized e-File Platform (MeF).

Additionally, as informed in our previous newsletter (LINK), starting with filing season 2027 (for tax year 2026 onwards), the IRIS platform will be the only system allowed to file information returns, effectively announcing the retirement of the FIRE system by that date.

PQS has already attained transmitter status with the IRS for IRIS. We will share additional updates next year concerning our experiences with the application process and provide further clarification on the types of services available for QIs, QDDs, U.S. withholding agents, and WFPs in relation to IRIS.

MiKaDiv

MiKaDiv (Geman: "Mitteilungsverfahren Kapitalertragsteuer auf Dividenden aus Aktien und Hinterlegungsscheine") is a new German regulatory initiative aimed at increasing tax transparency by introducing a standardized electronic reporting framework for certain types of capital income. In addition to the existing obligation to issue tax certificates upon a client’s request, MiKaDiv requires the electronic transmission of detailed information on capital income from shares held in collective custody, profit participation rights (Genussrechte), and convertible bonds to the German tax authorities.

The entry into force of the MiKaDiv reporting obligations has been postponed to 31 December 2026. As of that date, the relevant capital income must be reported electronically, with different reporting timelines applying depending on whether the recipient is subject to unlimited or limited German tax liability.

MiKaDiv is not directly applicable to Swiss financial institutions. However, Swiss financial institutions may consider making use of the MiKaDiv framework in respect of their own proprietary investments and may choose to implement corresponding processes where there is a clear business or operational case, for example if there is a significant number of clients that may be interested in German tax refunds or tax certificates.