Tax Treaty Case Law around the Globe 2012

Switzerland: Notion of Beneficial Ownership

18.1. Introduction

Decision A-6053/2010 of the Swiss Federal Administrative Court was the first ruling in a series of cases where the Federal Administrative Court dealt with the notions of “US person”, “offshore company account” and “beneficial ownership” as used in the Switzerland-United States treaty entered into in 2010 in order to regularize the administrative exchange of information requested by the IRS with regard to 4,450 UBS bank account holders (2010 Switzerland-United States treaty). This is where the importance of the ruling under review mainly stems from.

18.2. Facts of the case

The Liechtenstein foundation in question in the present case was established in 2002 and held a bank account with UBS in which its assets were deposited. The bank documentation identified a US citizen (non-US resident) as the beneficial owner (referred to as Mrs M) on Form A. This was not contested by Mrs M. She argued that this was due to her being named as primary beneficiary in the regulations of the foundation upon the opening of the bank account. In particular, she asserted that she was not a member of the board of the foundation, she did not have any...