Comment on page

AEOI - Q&A and Definitions

Information for clients

Information required under art. 14 of the Swiss Federal Act on the International Automatic Exchange of Information in Tax Matters (AEOI Act)
Backed Assets GmbH (Backed) is a reporting Swiss financial institution in accordance with the AEOI Act. 
Under the AEOI regime, Switzerland exchanges data with countries with which a reciprocal agreement is in place (Reportable Jurisdictions). You can see which countries have signed an AEOI agreement with Switzerland here: https://www.fedlex.admin.ch/eli/cc/2016/259/en​
How does AEOI work?
As a reporting Swiss financial institution, Backed must determine the tax residence(s) of all its clients.
Every year Backed must report to the Swiss Federal Tax Administration (FTA) certain information regarding all account holders who are tax resident in a Reportable Jurisdiction.
The FTA then sends the information reported to the tax authorities of the clients’ country of tax residence(s). 
How might AEOI affect you?
During the account opening process, you will be asked to confirm your jurisdiction(s) of tax residence and your Taxpayer Identification Number(s) (TIN).
What will Backed report to the FTA?
The reportable information includes:
the account holder’s personal data (name, address, country of tax residence, date of birth, TIN);
account information (account number, aggregate balance or value of the account by 31st December, investment income including total gross amount of interest, dividends or other income and total gross proceeds from sales or redemptions).
In certain cases, Backed must also report the Controlling Persons of entity account holder. 
If an entity classifies as Financial Institution, the entity itself may be responsible to report relevant account holders to its local tax authority.
For what purpose will this information be used?
The FTA will send the information received from Backed to the tax authority in the relevant Reportable Jurisdiction(s). In principle, the information exchanged may only be shared with the tax authorities of the relevant country/ies of tax residence and may only be used for tax purposes. The information must be treated as confidential.
What are your rights?
Under the AEOI Act and the Swiss Federal Act on Data Protection (FADP), you have the following rights:
Vis-à-vis Backed:
You are entitled to the full extent of legal protection offered by the FADP. In particular, you have the right to request what information Backed has collected about you and will be reported to the FTA.
You are entitled to request that incorrect data in Backed’s systems be corrected.
Vis-à-vis FTA:
You are entitled to access information.
You are entitled to request that incorrect data resulting from errors in the exchange process are corrected.
If the exchange of information were to result in disadvantages for you that are not permissible due to a lack of constitutional guarantees, your rights are set out in art. 25a of the Swiss Federal Act on Administrative Procedure.
You do not have the right to access FTA records. You do not have the right to block the disclosure of personal details to FTA. 
If you have any concerns about your tax obligations, please consult your legal or tax advisors.
​
DEFINITIONS
 
Account Holder
The term Account Holder means the person listed or identified as the holder of an account. A person, other than a Financial Institution, holding an account for the benefit or account of another person as agent, custodian, nominee, signatory, investment advisor, or intermediary, is not treated as holding the account, and such other person is treated as the Account Holder for FATCA/ AEoI purposes. Please note that for FATCA/ AEoI purposes in the case of trusts not the trustee is treated as holding the account, but the trust itself.
FATCA
FATCA is an abbreviation of Foreign Account Tax Compliance Act. This US tax legislation is aimed at identifying US Persons that have an account or financial assets outside of the United States.
Intergovernmental Agreement (IGA)
The term Intergovernmental Agreement, or short IGA, means an agreement or arrangement between the US and a foreign government governing the implementation of FATCA in such non-US jurisdiction.
CRS
“CRS” stands for Common Reporting Standard. It is an internationally agreed standard for Automatic Exchange of Information on financial account information, endorsed by the OECD and the Global Forum for Transparency and Exchange of Information for Tax Purposes. The CRS sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as the customer due diligence procedures to be followed by financial institutions.
Controlling Person
A natural person who exercises control over an entity. It generally includes all natural persons identified on designated forms for AML/KYC purposes (Forms A, K, S)
Participating (Partner) Jurisdiction
The term Participating (or Partner) Jurisdiction means a jurisdiction (i) with which Switzerland has an agreement in place pursuant to which such other jurisdiction will provide information about Swiss residents and their accounts, and (ii) which is identified in the following list: https://www.sif.admin.ch/sif/en/home/themen/internationale-steuerpolitik/automatischer-informationsaustausch.html.
Reportable Jurisdiction
The term Reportable Jurisdiction means a country/jurisdiction (i) with which Switzerland has an agreement in place pursuant to which Switzerland is obliged to provide the information about the residents of that country/jurisdiction and their accounts (Reportable Accounts), and (ii) which is identified in the following list: https://www.sif.admin.ch/sif/en/home/themen/internationale-steuerpolitik/automatischer-informationsaustausch.html. 
Reportable Account
The term Reportable Account means an account held by one or more Reportable Persons or by a Passive NFE (or a Professionally Managed Investment Entity in a Non-Participating Jurisdiction) with one or more Controlling Persons that is a Reportable Person, provided it has been identified as such pursuant to the applicable AEOI/CRS due diligence procedures.
Reportable Person
The term Reportable Person means a person that is resident for tax purposes in a Reportable Jurisdiction under the tax laws of such jurisdiction other than: (i) a corporation the stock of which is regularly traded on one or more established securities markets; (ii) any corporation that is a Related Entity of a corporation described in clause (i); (iii) a Governmental Entity; (iv) an International Organisation; (v) a Central Bank; or (vi) a Financial Institution.
(Foreign) Financial Institution (FFI/ FI)
An entity that qualifies as a Custodial Institution, a Depository Institution, an Investment Entity or a Specified Insurance Company.
Non-Financial (Foreign) Entity (NFFE/ NFE)
An entity that is not an FFI/ FI.
Active NFFE/ NFE
Active NFE by reason of income and assets:
​
less than 50% of the gross income for the preceding calendar year or other appropriate reporting period is passive income, and
less than 50% of the assets held by the NFE during the preceding calendar year or other appropriate reporting period are assets that produce or areheld for the production of passive income.
Qualified listed stock cooperation and their related entities
Governmental entities, international organizations, central banks and entities under the sole ownership of such NFEs.
Holding NFEs that are member of a non-financial group
​
substantially all (i.e. 80% or more measured against an entity’s gross income)  the activities of the NFE consist of holding (in whole or in part) the issued stock of one or more subsidiaries that engage in businesses other than the business of a FI, or
providing financing and services to such subsidiaries.
Start-up NFEs
​
is not yet operation
has not had any operations in the past
invests equity in assets with the intention of operating a business other than a FI, and
has been established for no more than 24 months.
NFEs that are liquidating or under reorganization
Treasury centers that are part of a non-financial group
Non-profit NFEs
Passive NFFE/ NFE
A NFE which is not an Active NFE; or
A professionally-managed investment entity resident in a Non-Participating jurisdiction.
Passive Income
Dividends, 
interest, 
income equivalent to interest, 
rents and royalties, other than rents and royalties derived in the active conduct of a business conducted, at least in part by the employees of the NFE
annuities
etc.
TIN
The term TIN means Taxpayer Identification Number or a functional equivalent in the absence of a TIN. A TIN is a unique combination of letters or numbers assigned by a jurisdiction to an individual or an entity and used to identify the individual or entity for the purposes of administering the tax laws of such jurisdiction. Further details of acceptable TINs can be found on the OECD AEOI Portal (http://www.oecd.org/tax/automatic-exchange/).
Custodial Institution
An entity that holds, as a substantial portion of its business, Financial Assets for the account of others. This is the case if the gross income of the entity attributable to the holding of Financial Assets and related financial services equals or exceeds 20 percent of the entity’s gross income during the shorter of the three-year period ending as of 31 December (or the final day of a non-calendar year accounting period) prior to the year in which the determination is being made, or the period during which the entity has been in existence.
Depository Institution
An entity that accepts deposits in the ordinary course of a banking or similar business. An entity conducts banking or similar activities if it accepts deposits or similar investments of funds (on the liabilities side of the balance sheet) while regularly engaging in at least one of the following activities (on the assets side of the balance sheet):
makes personal, mortgage, industrial, or other loans or provides other extensions of credit;
purchases, sells, discounts or negotiates accounts receivable, installment obligations, notes, bills of exchange, drafts, checks, acceptances or other evidence of indebtedness;
issues letters of credit and negotiates drafts drawn thereunder;
provides trust or fiduciary services;
finances foreign exchange transactions; or 
enters into, purchases, or disposes of finance leases or leased assets.
Under the CRS, an entity is not considered engaged in a banking or similar business if the entity solely accepts deposits from persons as a collateral or security payment pursuant to a sale or lease of property or pursuant to a similar financing arrangement between such entity and not the person from whom the entity received the deposit.
Entity
Legal entities and legal structures (e.g. stock corporations, partnerships, collective capital investment schemes, trusts or foundations)
Financial Assets
Includes securities (e.g. shares in the share capital of a corporation, interests or beneficial ownership of the interests in a free float or listed partnership or trust, as well as bonds, notes, debentures, other debt instruments or interests in collective investment schemes), partnership interests, commodity transactions, swaps, insurance or annuity contracts or interests in securities (including exchange traded and non-exchange traded futures and options).
The term Financial Assets does not include non-trading assets.
Investment Entity
An entity that meets at least one of the conditions a) or b) below:
a.     an entity that primarily conducts one or more of the following business activities for a customer:
i.               trading in money market instruments; foreign exchange; exchange, interest rate and index instruments; transferable securities; or commodities futures trading;
ii.              individual and collective portfolio management; or
iii.             otherwise investing, administering, or managing Financial Assets or money on behalf of other persons;
b.    an entity the gross income of which is primarily attributable to investing, reinvesting, or trading in Financial Assets, if the entity is managed by another entity that is a Depository Institution, a Custodial Institution, a Specified Insurance Company or an Investment Entity.
An entity is treated as primarily conducting as a business one or more of the activities described in a) above or an entities gross income is primarily attributable to investing, reinvesting or trading in Financial Assets for the purpose of b) above, if the entity’s gross income attributable to the relevant activities equals or exceeds 50 percent of the entity’s gross income during the shorter of (i) the three-year period ending as of 31 December of the year preceding the year in which the determination is made, or (ii) the period during which the entity has been in existence. The term “Investment Entity” does not include an entity that is an Active NFE.
Professionally managed
Another financial institution (e.g. bank, asset manager) performs with discretionary decision-making authority services on the entity’s behalf, such as:
Trading in financial instruments
Portfolio management
Otherwise investing, administering or managing funds, money or financial assets
It is sufficient if only parts of the entities’ assets are professionally managed as per above.
Specified Insurance Company
An entity that is an insurance company (or the holding company of an insurance company) that issues, or is obliged to make payments with respect to, a Cash Value Insurance Contract or an Annuity Contract. 
 
For additional information, please refer to the FTA’s publications on the subject: https://www.estv.admin.ch/estv/de/home/internationales-steuerrecht/international-aia/aia-publikationen.html#gesetzliche_grundlag__content_estv_de_home_internationales-steuerrecht_international-aia_aia-publikationen_jcr_content_par_tabs​
(available in German, French and Italian)
 
 

Backed ecosystem - Previous

Wrapped bTokens

Next - Legal & Compliance

FATCA/CRS

Last modified 3mo ago

Account Holder	The term Account Holder means the person listed or identified as the holder of an account. A person, other than a Financial Institution, holding an account for the benefit or account of another person as agent, custodian, nominee, signatory, investment advisor, or intermediary, is not treated as holding the account, and such other person is treated as the Account Holder for FATCA/ AEoI purposes. Please note that for FATCA/ AEoI purposes in the case of trusts not the trustee is treated as holding the account, but the trust itself.
FATCA	FATCA is an abbreviation of Foreign Account Tax Compliance Act. This US tax legislation is aimed at identifying US Persons that have an account or financial assets outside of the United States.
Intergovernmental Agreement (IGA)	The term Intergovernmental Agreement, or short IGA, means an agreement or arrangement between the US and a foreign government governing the implementation of FATCA in such non-US jurisdiction.
CRS	“CRS” stands for Common Reporting Standard. It is an internationally agreed standard for Automatic Exchange of Information on financial account information, endorsed by the OECD and the Global Forum for Transparency and Exchange of Information for Tax Purposes. The CRS sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as the customer due diligence procedures to be followed by financial institutions.
Controlling Person	A natural person who exercises control over an entity. It generally includes all natural persons identified on designated forms for AML/KYC purposes (Forms A, K, S)
Participating (Partner) Jurisdiction	The term Participating (or Partner) Jurisdiction means a jurisdiction (i) with which Switzerland has an agreement in place pursuant to which such other jurisdiction will provide information about Swiss residents and their accounts, and (ii) which is identified in the following list: https://www.sif.admin.ch/sif/en/home/themen/internationale-steuerpolitik/automatischer-informationsaustausch.html.
Reportable Jurisdiction	The term Reportable Jurisdiction means a country/jurisdiction (i) with which Switzerland has an agreement in place pursuant to which Switzerland is obliged to provide the information about the residents of that country/jurisdiction and their accounts (Reportable Accounts), and (ii) which is identified in the following list: https://www.sif.admin.ch/sif/en/home/themen/internationale-steuerpolitik/automatischer-informationsaustausch.html.
Reportable Account	The term Reportable Account means an account held by one or more Reportable Persons or by a Passive NFE (or a Professionally Managed Investment Entity in a Non-Participating Jurisdiction) with one or more Controlling Persons that is a Reportable Person, provided it has been identified as such pursuant to the applicable AEOI/CRS due diligence procedures.
Reportable Person	The term Reportable Person means a person that is resident for tax purposes in a Reportable Jurisdiction under the tax laws of such jurisdiction other than: (i) a corporation the stock of which is regularly traded on one or more established securities markets; (ii) any corporation that is a Related Entity of a corporation described in clause (i); (iii) a Governmental Entity; (iv) an International Organisation; (v) a Central Bank; or (vi) a Financial Institution.
(Foreign) Financial Institution (FFI/ FI)	An entity that qualifies as a Custodial Institution, a Depository Institution, an Investment Entity or a Specified Insurance Company.
Non-Financial (Foreign) Entity (NFFE/ NFE)	An entity that is not an FFI/ FI.
Active NFFE/ NFE	Active NFE by reason of income and assets: less than 50% of the gross income for the preceding calendar year or other appropriate reporting period is passive income, and less than 50% of the assets held by the NFE during the preceding calendar year or other appropriate reporting period are assets that produce or areheld for the production of passive income. Qualified listed stock cooperation and their related entities Governmental entities, international organizations, central banks and entities under the sole ownership of such NFEs. Holding NFEs that are member of a non-financial group substantially all (i.e. 80% or more measured against an entity’s gross income) the activities of the NFE consist of holding (in whole or in part) the issued stock of one or more subsidiaries that engage in businesses other than the business of a FI, or providing financing and services to such subsidiaries. Start-up NFEs is not yet operation has not had any operations in the past invests equity in assets with the intention of operating a business other than a FI, and has been established for no more than 24 months. NFEs that are liquidating or under reorganization Treasury centers that are part of a non-financial group Non-profit NFEs
Passive NFFE/ NFE	A NFE which is not an Active NFE; or A professionally-managed investment entity resident in a Non-Participating jurisdiction.
Passive Income	Dividends, interest, income equivalent to interest, rents and royalties, other than rents and royalties derived in the active conduct of a business conducted, at least in part by the employees of the NFE annuities etc.
TIN	The term TIN means Taxpayer Identification Number or a functional equivalent in the absence of a TIN. A TIN is a unique combination of letters or numbers assigned by a jurisdiction to an individual or an entity and used to identify the individual or entity for the purposes of administering the tax laws of such jurisdiction. Further details of acceptable TINs can be found on the OECD AEOI Portal (http://www.oecd.org/tax/automatic-exchange/).
Custodial Institution	An entity that holds, as a substantial portion of its business, Financial Assets for the account of others. This is the case if the gross income of the entity attributable to the holding of Financial Assets and related financial services equals or exceeds 20 percent of the entity’s gross income during the shorter of the three-year period ending as of 31 December (or the final day of a non-calendar year accounting period) prior to the year in which the determination is being made, or the period during which the entity has been in existence.
Depository Institution	An entity that accepts deposits in the ordinary course of a banking or similar business. An entity conducts banking or similar activities if it accepts deposits or similar investments of funds (on the liabilities side of the balance sheet) while regularly engaging in at least one of the following activities (on the assets side of the balance sheet): makes personal, mortgage, industrial, or other loans or provides other extensions of credit; purchases, sells, discounts or negotiates accounts receivable, installment obligations, notes, bills of exchange, drafts, checks, acceptances or other evidence of indebtedness; issues letters of credit and negotiates drafts drawn thereunder; provides trust or fiduciary services; finances foreign exchange transactions; or enters into, purchases, or disposes of finance leases or leased assets. Under the CRS, an entity is not considered engaged in a banking or similar business if the entity solely accepts deposits from persons as a collateral or security payment pursuant to a sale or lease of property or pursuant to a similar financing arrangement between such entity and not the person from whom the entity received the deposit.
Entity	Legal entities and legal structures (e.g. stock corporations, partnerships, collective capital investment schemes, trusts or foundations)
Financial Assets	Includes securities (e.g. shares in the share capital of a corporation, interests or beneficial ownership of the interests in a free float or listed partnership or trust, as well as bonds, notes, debentures, other debt instruments or interests in collective investment schemes), partnership interests, commodity transactions, swaps, insurance or annuity contracts or interests in securities (including exchange traded and non-exchange traded futures and options). The term Financial Assets does not include non-trading assets.
Investment Entity	An entity that meets at least one of the conditions a) or b) below: a. an entity that primarily conducts one or more of the following business activities for a customer: i. trading in money market instruments; foreign exchange; exchange, interest rate and index instruments; transferable securities; or commodities futures trading; ii. individual and collective portfolio management; or iii. otherwise investing, administering, or managing Financial Assets or money on behalf of other persons; b. an entity the gross income of which is primarily attributable to investing, reinvesting, or trading in Financial Assets, if the entity is managed by another entity that is a Depository Institution, a Custodial Institution, a Specified Insurance Company or an Investment Entity. An entity is treated as primarily conducting as a business one or more of the activities described in a) above or an entities gross income is primarily attributable to investing, reinvesting or trading in Financial Assets for the purpose of b) above, if the entity’s gross income attributable to the relevant activities equals or exceeds 50 percent of the entity’s gross income during the shorter of (i) the three-year period ending as of 31 December of the year preceding the year in which the determination is made, or (ii) the period during which the entity has been in existence. The term “Investment Entity” does not include an entity that is an Active NFE.
Professionally managed	Another financial institution (e.g. bank, asset manager) performs with discretionary decision-making authority services on the entity’s behalf, such as: Trading in financial instruments Portfolio management Otherwise investing, administering or managing funds, money or financial assets It is sufficient if only parts of the entities’ assets are professionally managed as per above.
Specified Insurance Company	An entity that is an insurance company (or the holding company of an insurance company) that issues, or is obliged to make payments with respect to, a Cash Value Insurance Contract or an Annuity Contract.