Form R Accounts

The Swiss Bankers Association assessed the situation regarding Form R accounts of lawyers and solicitors/law firms and notary’s offices, which have been opened before July 1, 2014.

According to circular no. 7853 of the Swiss Bankers Association, accounts with a net balance exceeding USD 1m, which did not meet all documentation requirements as of June 30, 2015, are required to apply the presumption rules according to section 1.1471-3(f) of the Final FATCA regulations. Applying the presumption rules, a Form R-Account qualifies as a business account if a Swiss Bank does not have sufficient documentation about the beneficial owner of the account. 

After consultation with US tax-specialists, the Swiss Bankers Association deemed it justifiable to treat all Form R accounts as business accounts and adopt the effective deadline for business accounts (June 30, 2016) in order to comply with FATCA. This leads to the following implications:

1. The deadline for undocumented Form R accounts with a net balance exceeding USD 1m is June 30, 2016. There is no need to report these accounts as accounts of non-participating Financial Institutions (NPFFIs) for fiscal year 2015.

2. Form R accounts, which have already been labeled as NPFFIs according to circular 7853 but have not yet been reported, can be relabeled as "pending” until June 30, 2016.

3. Form R-Accounts opened before July 1, 2014, which remain undocumented after June 30, 2016, will have to be classified as NPFFIs.