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Swiss-Americans ditch US passports

With financial relations between Washington and Bern increasingly strained, more and more Swiss-Americans are giving up their US citizenship, figures show. 

Swiss-Americans ditch US passports
Sean Hobson (File)

The number of dual nationality Swiss-Americans renouncing their US passports has risen sharply in recent years, due in large part to the pressure being exerted by the IRS, the US tax authority, online news site Le Matin reported.

The United States is one of the only countries in the world that taxes its citizens even when they have settled abroad. This means that all Americans living in Switzerland, even if they have dual American-Swiss nationality, must complete and submit a US tax return.

In addition to this tax return burden, the recent pressure placed on Swiss banks by the IRS to disclose details of US clients to ensure compliance with the US tax regime has caused Swiss banks and asset managers to reject clients with any US affiliation. In one case, a man who had been settled in Switzerland was thrown out of his bank for having US citizenship.

Frustrated by the bureaucratic hurdles forced upon them by Washington, many people are opting to give up their little blue passports.

Last year, some 2,000 people worldwide renounced their US citizenship, a figure seven-times higher than it was four years ago. Of those 2,000, some 500 came from Switzerland, newspaper Tages Anzeiger reports.

Ryan Larson, a US tax expert living in Zurich, confirmed that he has also seen more and more dual nationals give up their US passports. In 2011, he helped some 50 people renounce their US citizenship, while in 2010 he dealt with only half that number.

Larson expects the situation to further worsen when the new Foreign Account Tax Compliance Act comes in to force next year. The new law will require banks either to give up details of their US clients or to withhold 30 percent on all receipts from the US, Le Matin reported.

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SWISS CITIZENSHIP

Do EU residents in Switzerland need to get Swiss citizenship?

If you come from the European Union or Norway, Iceland, or Liechtenstein (EFTA) and live in Switzerland you may be wondering whether applying for Swiss nationality is worth your while.

Do EU residents in Switzerland need to get Swiss citizenship?

While many foreign residents are impatiently waiting for the moment when they will be eligible to apply for a Swiss passport, others are in no rush to do so.
 
The desire (or the lack thereof) to become a citizen of Switzerland — in addition to maintaining their original nationality, if they decide to do so — varies from person to person, depending on many different factors.

The main one is undoubtedly whether the foreigner intends to stay in Switzerland indefinitely, or plans to return home eventually.

Another reason may very well be the desire to participate fully and completely in Switzerland’s  political life and democratic processes — that is, to vote in referendums and elections, and feel that your opinion matters.

But a lot may also depend on another factor: your nationality.

For people from third countries who have lived in Switzerland long enough — 10 years with  a B or L permit — before finally being eligible for their permanent residency C permit, is a huge event. (Americans and Canadians, on the other hand, can apply for a C permit after five years of consecutive residence).

It is therefore logical that many of these people, whose status in Switzerland has been conditional and tenuous for many years, will jump on the opportunity to be naturalised and ‘regularise’ their situation.

What about people from the EU / EFTA?

Admittedly, there is far less urgency — or need, for that matter — to become a Swiss citizen if you have a passport from an EU or EFTA state.

That’s because you have an almost unlimited access to Swiss jobs and residency, as well as sweeping rights overall. For instance, you are free to change jobs and move from one canton to another.

Another benefit that you, as a citizen of an EU / EFTA state have, is that you can come to Switzerland and look for work for up to six months without any visa requirements.

Also, in case of a job loss, an EU / EFTA citizen doesn’t have to leave Switzerland immediately.

Instead, they may stay in the country for at least six months to seek new employment. 

Another perk is that if you are living in Switzerland as an EU/EFTA citizen, you can purchase property – indeed, you have the same rights in this regard as Swiss citizens do.

You do not need a permit or any additional permissions that a Swiss citizen would not require to buy property. 

READ ALSO: Just how freely can EU citizens move to (and within) Switzerland?

All this to say that you can live in Switzerland pretty much indefinitely on your EU / EFTA passport, and neither your residency nor employment is subject to the same restrictions as those imposed on third country nationals.

You basically enjoy the same rights as Swiss citizens, except for the right to vote, which may or may not matter to you.

In that respect, you don’t need a Swiss passport, especially if you don’t plan to remain in the country longterm.

However…

…if you do want to continue living in Switzerland, it may be worth your while to apply for naturalisation, if only out of pragmatism.

That’s because if you leave the country for more than six months on a B permit, you will lose the residency rights (though can re-apply to have them re-established).

With a C permit, you have the benefit of putting it on hold for up to four years. But if you neglect to do so, then the permit (and your permanent residency status) will expire.

READ ALSO: How long can I stay out of Switzerland and keep my residency rights?

So in this respect at least, having a Swiss passport will give you more flexibility and security.
 
 
 
 
 
 
 
 
 
 
 
 

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