Swiss Pension FATCA & Form 8938 Reporting

Swiss Pension FATCA & Form 8938 Reporting

Swiss Pension FATCA & Form 8938 Reporting

Swiss Pension FATCA & Form 8938 Reporting: Many U.S. Persons approach us each year with the concern of whether Swiss Pension income is taxable in the U.S. and how to report the Swiss Pension, and if it is reportable. The Swiss Pension is a hybrid, state-mandated and private investment.

The pension system is Switzerland is comprised of three (3) pillars, with the first two pillars as mandatory, and the third pillar (a) and (b) as elective.

Oftentimes, the tax requirements involving the Swiss pension is the catalyst for determining how to disclose on a tax return But, after reading about FBAR, FATCA and Form 8938, a common question we receive is how the Swiss Pension is reported on the FBAR.

With the IRS taking an aggressive position on matters involving foreign accounts compliance and unreported income, it is important to understand the basics of reporting.

FATCA & Form 8938 Swiss Pension Reporting

FATCA is the Foreign Account Tax Compliance Act. As a result of FATCA, more than 300,000 Foreign Financial Institutions (FFIs) in over 110 countries report U.S. account holder information to the IRS. For tax filers in the U.S. they will report their Swiss Pension account on Form 8938.

Pillar 1 & FATCA Form 8938 Swiss Pension Reporting

The First Pillar of Swiss Pension most closely resembles U.S. social security.

There is no separate account number and no defined amount.

Therefore, Pillar 1 is not generally reportable on the Form 8938.

Pillar 2 & FATCA Form 8938 Swiss Pension Reporting

With the Second Pillar, it is most similar to a 401K investment — although the Pillar 2 is mandatory in Switzerland, whereas the 401K is not mandatory.

The 2nd Pillar is not a joint fund, but rather an individualized investment fund based on the specific investment/deferral amounts by the employee and employee.

As a result, Pillar 2 accounts are generally reportable on the Form 8938.

Pillar 3 & FATCA Form 8938 Swiss Pension Reporting

The Pillars 3 (a) and (b) are similar to an IRA and other investments types.

It is not mandatory and there are individualized investment accounts which are determined by the specific investment/deferral amounts by the employee and employee.

Thus, Pillar 3 accounts are generally reportable on the Form 8938.

Unreported Swiss Pension FATCA Form 8938 Penalties

If a person has not timely reported their Form 8938 on their tax return to the Internal Revenue Service. they may become subject to FATCA penalties, and other offshore fines.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.

Each case is led by a Board-Certified Tax Law Specialist with 20 years of experience, and the entire matter (tax and legal) is handled by our team, in-house.

*Please beware of copycat tax and law firms misleading the public about their credentials and experience.

Less than 1% of Tax Attorneys Nationwide Are Certified Specialists

Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.

Recent Golding & Golding Case Highlights

  • We represented a client in an 8-figure disclosure that spanned 7 countries.
  • We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
  • We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
  • We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
  • We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.

How to Hire Experienced Offshore Counsel?

Generally, experienced attorneys in this field will have the following credentials/experience:

  • Board Certified Tax Law Specialist credential
  • Master’s of Tax Law (LL.M.)
  • 20-years experience as a practicing attorney
  • Extensive litigation, high-stakes audit and trial experience
  • Dually Licensed as an EA (Enrolled Agent) or CPA

Interested in Learning More about Golding & Golding?

No matter where in the world you reside, our international tax team can get you IRS offshore compliant. 

Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.