Credit Suisse whistleblowers say Swiss bank has been helping wealthy Americans dodge U.S. taxes

[BlueMTexpat]

8. When I arrived in Switzerland

nearly three decades ago, I was easily able to open an account with the Swiss Bank Corporation (SBC) because I was an "international civil servant" (ICS) to whom special banking laws applied. In 1998, SBC merged with the Union Bank of Switzerland and is now part of today's UBS.

I have remained a client since then and UBS also holds the mortgage on my apartment here. When I had to refinance in 2021, they gave me an excellent interest rate because I have been a longtime client. They have always treated me fairly. I can only speak to my own experience.

After the IRS really put the screws on the Swiss banks for derelict US citizens - a lesson that Crédit Suisse didn't seem to learn - UBS has scrupulously reported my own account holdings to the IRS. In addition, I must file an annual Foreign Bank Accounts Report (FBAR) separately from my regular income taxes for the IRS.

Because my foreign financial assets are well below the IRS reporting threshhold, I do NOT have to file Form 8938, thank heavens. But many US citizens or dual US nationals who live here must do so. They REALLY hate that requirement.

As a legal US citizen retiree resident in Switzerland, I must file BOTH US and Swiss tax returns. For me, it is not really double taxation because the Swiss don't charge me taxes on my US SSI, pension or IRA income as the IRS taxes me on those. When I received a salary here while working for international organizations, I also had to report that to the IRS but my ICS status granted me special treatment by both countries; there was no reporting requirement at all for Switzerland then.

For some time after my official retirement, I worked as a consultant for international organizations and then as an adjunct professor at a local university. I had to report that income to both taxing authorities and my ICS status no longer applied. But because it was presumed that Switzerland would tax me on that income, there was an IRS exemption for a certain amount of foreign earned income and that also could be offset by expenses and Swiss taxes here.

I am not sure to what extent those rules apply now because of the Trump tax cuts. I have received no salary or fee income here since 2015 so I've no longer had to comply with that requirement.

But the Swiss wealth tax applies to the VALUE of all real estate and financial assets I hold in BOTH countries - IRA value excepted - as of 31 December of each year. It's not a huge bite because my asset values are fairly modest. But it is an extra tax payment that I accept because I LOVE living here.

As you say, it is almost impossible for expat Americans without some sort of "in" - usually through their employers - to get a local bank account here. The cantonal banks will not even accept dual national Swiss-Americans as clients since the banking crisis in 2008 because they absolutely refuse to report to the IRS. Some dual national Swiss-Americans I know even gave up their US citizenship so that they could keep their cantonal bank accounts here.

I am so sick of people who do NOT follow the rules just because they can get away with it. Most of us DO follow the rules.

WE should NOT be the ones punished for doing so.