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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2834
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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Aaagh. I am wanting to open a Swiss bank account to buy a

Customer Question

Aaagh. I am wanting to open a Swiss bank account to buy a flat there. I am worried about taxation and following regulations.
Marie
Will I have to pay taxes there and here in the US? How much extra paperwork is it to open a Swiss account? Is there a problem with buying property there from the US point of view? What about capital gains when I sell---do I have to pay here and in Switzerland?
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you today.

Any adult person can open an account at a bank in Switzerland. However, the legal provisions of Switzerland with regard to cross border business have to be respected. Banks reserve furthermore the right to reject customers. http://www.swissbanking.org/en/faq#sthash.2HwvE8QF.dpuf

If you are a U.S. citizen and you have a foreign bank account, you will have a reporting requirement to the IRS via FBAR if there is $10,000 at any time during the calendar year in the account. http://www.irs.gov/Businesses/Comparison-of-Form-8938-and-FBAR-Requirements

Also, as a U.S. citizen you are required to report your worldwide income, so the interest earned on the money in the Swiss bank account will be reported on your U.S. tax return.

If you are planning to rent the flat, the income (and expenses) will be reported on your U.S. tax return. If and when you sell the flat, you will report the sale and pay tax on any capital gains realized from the sale in the U.S. and Switzerland.

http://www.globalpropertyguide.com/Europe/Switzerland/Taxes-and-Costs

There is a Tax Treaty in place between the U.S. and Switzerland which provides for relief from double taxation. In other words, if you are a resident of the U.S., you would receive a credit for any taxes paid to Switzerland. Please refer specifically to Articles 6, 11, 13 and 23 of the Tax Treaty.

http://www.irs.gov/pub/irs-trty/swiss.pdf

I realize this is a great deal of information, but once you have had an opportunity to review it, please come back to me here at your convenience if you have any other questions or concerns.

Thank you and best regards,

Barb

Expert:  Barbara replied 1 year ago.
Just following up with you to see if you have any other questions. If so, please come back to me here at your convenience, and I will be happy to assist you. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me.
Thank you and best regards,
Barb

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