Swisslife Powerpoint Template EN

FATCA im Bereich der Lebensversicherung
«Insurance-Tax-Tagung SVV»
Dr. Peter Lang
Steuerdienst Swiss Life
4. April 2013
1 Introduction
Treasury Regulation
US-Law
January 17, 2013
CH
Life Insurer
IGA Model II USA-CH
2
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
3 Life Insurer as a «Financial Institution»
“Foreign Financial
Institution” (FFI)
* IGA CH Art. 2 Abs. 1 Ziff. 7, p. 2
4
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
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
4 Life Insurance Products as a «Financial
Account»
“Financial Account” (FFI)
…
* Treasury Regulations, January 17, 2013, § 1.1471-5(b)(1)(iv).
7
5 Cash Value Insurance Contract
“Cash Value
Insurance Contract”
Ausnahmen:
• Indemnity reinsurance
• Term life
* Treasury Regulations, January 17, 2013, § 1.1471-5(b)(3)(vii).
8
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, § 1.1471-5(b).
9
7 Begriff des «Cash Values» im Bereich
«Cash Value Insurance Contract»
* Treasury Regulations, January 17, 2013, § 1.1471-5(b)(3)(vii)(B).
10
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
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
Not included elements
7 Begriff des «Cash Values» im Bereich
«Cash Value Insurance Contract»
* Treasury Regulations, January 17, 2013, § 1.1471-5(b)(3)(vii)(C).
13
8 Begriff des «Cash Values» im Bereich
«Annuity Contract»
* Treasury Regulations, January 17, 2013, § 1.1471-5(b)(4)(ii).
14
8 Begriff des «Cash Values» im Bereich
«Annuity Contract»
* Treasury Regulations, January 17, 2013, § 1.1471-5(b)(4)(ii).
15
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
rückkaufsfähig)
•
Erwerbsunfähigkeitsrente (Versicherungszweig A3.2; Kriterien zutreffend ???)
(Versicherungszweig
A3.2;
rückkaufsfähig
/
nicht
16
9 Begriff des «Account Holders»
* IGA CH-USA, Art. 2 Abs. 1 Ziff. 24, p. 4.
17
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. 4.
18
10 Impact on insurance business - Summary
The concept of FATCA is based on two basic
assumptions:
“Foreign Financial
Institution” (FFI)
Term of
“Specified
Insurance
Company”
Term of
“Account
Holder”
“Financial Account”
Term of
“Cash Value
Insurance”
Term of
“Annuity
Contract”
Term of
“Cash Value”
19
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, § 1.1471-5(b)(3)(i).
20
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
(II) Obtain
Waiver
of
(II)a Terminate client
US
relationship with
Clients
recalcitrant clients
(III) Annual reporting
to IRS
21
13 Implementation Identification-Process
from a Lifecycle point of view
Information duties of the
client
(«Informationspflichten»)
Participation duties of the
client
(«Mitwirkungspflichten»)
Identification
beneficiary
Surveillance-Process
during the lifetime
of the contract
(«changes of
circumstances»)
Identification-Duties
Offering-Process
(Onboarding of new
Clients)
Scope of the FATCA-Project
Contract Life-Cycle
(Value-Chain)
Identification of
the Policyholder
(application-form)
Payout-Process
22
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
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
15 Treaty Structures
Structure of FATCA Agreements (IGA I and IGA II):
«Agreement» itself
«Annex I»
==> Identification
«Annex II»
==> Local exemptions*
Identical wording
( Definitions; adjustements
possible)
Global standard
( processes; adjustements
„impossible“)
Same structure but
different content
( adoption to local
requirements)
* Non-Reporting Financial Institutions and Products
25
16 Annex I – Identification (“Onboarding”) (1)
Financial Accounts
New
Accounts
Preexisting
Accounts
Individual
Accounts
Entity
Accounts
Affects existing book
Individual
Accounts
Entity
Accounts
Affects future business
(processes,
implementation requirements)
26
17 Annex II – Non-Reporting Financial
Institutions and Products (1)
There is a specific clause on «retirement plans» in the treaties:
27
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
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
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
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
The future starts here.
32