U.S.-Switzerland Tax Planning and Traps to Avoid: Reporting Issues, Tax Treaties, Passive Income, Pass-Through Income

The U.S. and Switzerland have significant economic and social ties resulting in a constant flow of cross-border business transactions and citizens migrating between the two countries. Tax counsel and advisers must navigate challenges stemming from the interpretation and enforcement of U.S. and Switzerland tax rules to avoid adverse tax liability from either country.

Among the most critical planning challenges for cross-border activities is reconciling the U.S. and Switzerland rules governing residence and domicile. Switzerland domicile rules are complex, and even inadvertent failure to meet filing obligations due to a misapplication of domicile rules can be costly. U.S. tax advisers serving clients with a presence in the U.S. and Switzerland will need to understand the domicile rules to avoid costly tax and penalties.

Another critical planning element is avoiding dual taxation on income and gains. The U.S. has detailed domestic foreign tax credit rules, along with a comprehensive tax treaty with Switzerland that together address most dual taxation concerns, but, as in all international planning, tax advisers must understand the particular provisions to avoid an unpleasant tax bill--or maybe two.

Other areas of concern in U.S.-Switzerland tax planning include treatment of passive income and tax considerations of cross-border pension ownership, contributions, and withdrawals. Hovering over all these concerns are the extensive U.S. tax reporting requirements imposed on taxpayers with U.S. filing obligations.

Listen as our experienced panel provides comprehensive and practical guidance on navigating U.S.-Switzerland cross-border tax planning and reporting issues.

I. The U.S.-Switzerland income tax treaty overview and dual tax mitigation provision

II. Domicile and residency rules

III. Passive and unearned income treatment

IV. U.S. tax reporting requirements of Switzerland-sourced investments

V. Limitation of benefit provisions

The panel will review these and other important topics:

• What are the applicable domestic and treaty provisions for mitigating dual taxation on ownership of cross-border pass-through entities and trusts?
• Limitation of benefits clauses and provisions in the U.S.-Switzerland income tax treaty
• Key risks and challenges of passive/unearned income in cross-border situations
• U.S. reporting requirements of Switzerland-sourced investments

Learning Objectives

After completing this course, you will be able to:

• Recognize U.S. tax reporting requirements for U.S. taxpayers residing in Switzerland
• Establish the domicile of the taxpayer and whether tax treaty benefits are available based upon the determined domicile
• Distinguish among the various tests used to determine whether a taxpayer is eligible for tax treaty benefits
• Identify opportunities to mitigate dual taxation
• Identify the limitations of benefits in the U.S.-Switzerland tax treaty

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of foreign information reporting requirements, including FATCA and FinCEN Form 114; familiarity with foreign income sourcing rules and tax treaty provisions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).