FATCA im Bereich der Lebensversicherung «Insurance-Tax-Tagung SVV» Dr. Peter Lang Steuerdienst Swiss Life

Transkript

1 FATCA im Bereich der Lebensversicherung «Insurance-Tax-Tagung SVV» Dr. Peter Lang Steuerdienst Swiss Life 4. April 2013

2 1 Introduction US-Law Treasury Regulation January 17, 2013 CH Life Insurer IGA Model II USA-CH 2

3 2 FATCA and Life Insurance The FATCA concept is based on two main assumptions: Foreign Financial Institution (FFI) Financial Account Question: Does insurance business fulfill these two assumptions? 3

4 3 Life Insurer as a «Financial Institution» Foreign Financial Institution (FFI) * IGA CH Art. 2 Abs. 1 Ziff. 7, p. 2 4

5 3 Life Insurer as a «Financial Institution» Foreign Financial Institution (FFI) Conclusion: From US aspects a life insurance company qualifies as a FFI and therefore, is affected by FATCA regulations. * IGA CH Art. 2 Abs. 1 Ziff. 12, p. 3 5

6 4 Life Insurance Products as a «Financial Account» Link to US-law resp. US-Treasury Regulation. * IGA CH Art. 2 Abs. 1 Ziff. 25, p. 5 6

7 4 Life Insurance Products as a «Financial Account» Financial Account (FFI) * Treasury Regulations, January 17, 2013, (b)(1)(iv). 7

8 5 Cash Value Insurance Contract Cash Value Insurance Contract Ausnahmen: Indemnity reinsurance Term life * Treasury Regulations, January 17, 2013, (b)(3)(vii). 8

9 6 Annuity Contract Annuity Contract Periodische Leistungen u.a. abhängig von der Lebenserwartung. Relevant ist die Betrachtung unter CH-Recht. * Treasury Regulations, January 17, 2013, (b). 9

10 7 Begriff des «Cash Values» im Bereich «Cash Value Insurance Contract» * Treasury Regulations, January 17, 2013, (b)(3)(vii)(B). 10

11 7 Begriff des «Cash Values» im Bereich «Cash Value Insurance Contract» «Cash Value»: In general the «Cash Value» of an Insurance Contract is consistent with the Swiss «Rückkaufswert» / «Abfindungswert». * zum Rückkaufswert vgl. auch Art. 91 VVG und Art. 127 AVO. 11

12 7 Begriff des «Cash Values» im Bereich «Cash Value Insurance Contract» «Cash Value»: Policendarlehen sind begrenzt durch Rückkaufswert. Schlussfolgerung: Bei Insurance Contracts wird der Cash Value idr durch den Rückkaufswert bestimmt. 12

13 Not included elements 7 Begriff des «Cash Values» im Bereich «Cash Value Insurance Contract» * Treasury Regulations, January 17, 2013, (b)(3)(vii)(C). 13

14 8 Begriff des «Cash Values» im Bereich «Annuity Contract» * Treasury Regulations, January 17, 2013, (b)(4)(ii). 14

15 8 Begriff des «Cash Values» im Bereich «Annuity Contract» * Treasury Regulations, January 17, 2013, (b)(4)(ii). 15

16 8 Begriff des «Cash Values» im Bereich «Annuity Contract» ACHTUNG: Bei «Annuities» ist die Definierung als «Account» ausdrücklich nicht an das Vorhandensein eines klassischen Cash Values (Rückkaufswertes) geknüpft (eigenständige Definition des Cash Value Begriffs im Berich der Annuities). Anwendungsfälle «Annuity Contract»: Fondsanteilgebundene Rentenversicherung (Versicherungszweig A 2.3; rückkaufsfähig / nicht rückkaufsfähig) An interne Anlagebestände oder andere Bezugswerte gebundene Rentenversicherungen (Vesicherungszweig A2.5; rückkaufsfähig / nicht rückkaufsfähig) Einzelrentenversicherungen (Versicherungszweig A3.2; rückkaufsfähig / nicht rückkaufsfähig) Erwerbsunfähigkeitsrente (Versicherungszweig A3.2; Kriterien zutreffend???) 16

17 9 Begriff des «Account Holders» * IGA CH-USA, Art. 2 Abs. 1 Ziff. 24, p

18 9 Begriff des «Account Holders» Versicherungsnehmer entspricht während der Laufzeit dem «Account Holder» («any person entitled to access the Cash Value or change the beneficiary»). Widerruflich Begünstigter ist während der Laufzeit nicht der «Account Holder» (no access to the Cash Value and no right to change the beneficiary). Unwiderruflich Begünstigter ist während der Laufzeit nicht der «Account Holder» (no access to the Cash Value and no right to change the beneficiary). * IGA CH-USA, Art. 2 Abs. 1 Ziff. 24, p

19 10 Impact on insurance business - Summary The concept of FATCA is based on two basic assumptions: Foreign Financial Institution (FFI) Financial Account Term of Specified Insurance Company Term of Account Holder Term of Cash Value Insurance Term of Annuity Contract Term of Cash Value 19

20 12 «Depository Account» im Lebensversicherungsbereich Reminder: There are further business constellations besides the formal insurance contracts - of an insurance carrier which could be affected.* Versicherungszweig A6, AVO (bsp. Kapitalisationsprodukte) * Treasury Regulations, January 17, 2013, (b)(3)(i). 20

21 13 Identification as a Core-Process Conclusion: Generally, life insurance business with savings components are in the focus of FATCA. (I) Identification of US Accounts Identification of the relevant «Account Holder» is one of the important tasks implementing FATCA (IV) Penalties for not participating FFIs and recalcitrant account holders (III) Annual reporting to IRS (II) Obtain Waiver of (II)a Terminate client US relationship with Clients recalcitrant clients 21

22 Contract Life-Cycle (Value-Chain) Scope of the FATCA-Project Identification-Duties 13 Implementation Identification-Process from a Lifecycle point of view Identification of the Policyholder (application-form) Offering-Process (Onboarding of new Clients) Information duties of the client («Informationspflichten») Participation duties of the client («Mitwirkungspflichten») Surveillance-Process during the lifetime of the contract («changes of circumstances») Identification beneficiary Payout-Process 22

23 14 IGA CH-USA Withholding (1) Bilateral agreements «IGA II» - special points of the CH-Agreement: In defined cases the FFI will be forced to levy a withholding of 30%. This could result in conflicts with the local insurance contract law (shift of the withholding tax to the policyholder). The IGA II foresees a clause considering that the amount of tax withheld on payments to a Financial Account, including a Cash Value Insurance Contract and a Annuity Contract could be borne by the Account holder. Formal base to shift the withholding tax to the client (potential conflict of law based on the insurance contract law the insurer has to pay the fixed benefits) 23

24 14 Treaty CH-USA Withholding (1a) Bilateral agreements «IGA II» - special points of the CH-Agreement (Art. 7 Abs. 2 IGA CH-USA): Formal base to shift the withholding tax to the client (potential conflict of law based on the insurance contract law the insurer has to pay the fixed benefits) 24

25 15 Treaty Structures Structure of FATCA Agreements (IGA I and IGA II): «Agreement» itself «Annex I» ==> Identification Identical wording ( Definitions; adjustements possible) Global standard ( processes; adjustements impossible ) «Annex II» ==> Local exemptions* Same structure but different content ( adoption to local requirements) * Non-Reporting Financial Institutions and Products 25

26 16 Annex I Identification ( Onboarding ) (1) Financial Accounts Preexisting Accounts New Accounts Individual Accounts Entity Accounts Individual Accounts Entity Accounts Affects existing book Affects future business (processes, implementation requirements) 26

27 17 Annex II Non-Reporting Financial Institutions and Products (1) There is a specific clause on «retirement plans» in the treaties: 27

28 18 Annex II Non-Reporting Financial Institutions and Products (2) Bilateral agreements «IGA II» - special points of the CH-Agreement: The following institutions are defined as NON-Reporting Swiss Financial Institutions. They are treated as exempt beneficial owners for purposes of section 1741 («FATCA») of the US Internal Revenue Code: Vorsorgeeinrichtung der 2. Säule («pension institution or other retirement arrangement established in CH» according to Art. 48/49 BVG; Art. 89bis ZGB; Art. 331 OR) Freizügigkeitseinrichtungen («vested benefit institutions»; Art. 4 FZG und Art. 10 FZV) Auffangeinrichtung («substitute occupational pension fund») Sicherheitsfonds («guarantee fund») Einrichtungen der gebundenen Selbstvorsorge (institutions of pillar 3a) Wohlfahrtsfonds («employer-funded wlefare funds») Anlagestiftungen («investment foundations»; Art. 53g-53k BVG) 28

29 18 Annex II Non-Reporting Financial Institutions and Products (3) Bilateral agreements «IGA II» - special points of the CH-Agreement: Exempt Products: The following categories of accounts and products shall not be treated as Financial Accounts, and therefore shall not be U.S. Reportable Accounts, under the agreement: «Retirement accounts or products held by one or more exempt beneficial owners.» This exemptions includes all the group life insurance contracts in the field of the second pillar. «Vested benefit insurances» (Art. 10 II FZV) «Restricted pension plan insurances» (life insurance in the field of the pillar 3a) 29

30 18 Annex II Non-Reporting Financial Institutions and Products (3) «Retirement accounts or products held by one or more exempt beneficial owners.» Lebensversicherer Kollektivlebensversicherungsvertrag Vorsorgeeinrichtung (2. Säule) Versicherungsnehmer «Exempt Beneficial Owner» 30

31 18 Annex II Non-Reporting Financial Institutions and Products (3) «Retirement accounts or products held by one or more exempt beneficial owners.» Why do we need the IGA CH-USA? Die Definitionen im Bereich der beruflichen Vorsorge in der Regulation sind enger als im IGA CH-USA. 31

32 The future starts here. 32