SWITZERLAND Law and Practice Contributed by: René Matteotti, Monika Bieri, Daniel Schönenberger and Manuel Ulrich, Tax Partner AG
Automatic Exchange of Information on Country- by-Country Reports (CbCR) As of 1 January 2017, Switzerland also signed the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (MCAA CbCR). However, the MCAA CbCR will not be appli - cable between Switzerland and another state until the other state has also included Switzerland on its list. 6.2 Joint Audits In principle, Switzerland does not participate in joint audits. In particular, Switzerland has filed a declaration under Article 9 (3) of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters that it does not accept requests aimed at allowing foreign tax officials to be present during tax examinations in Switzerland. As a result, “true” on-site joint audits (both administrations physically auditing together on Swiss territory) are, as a rule, typically not available in practice. There is no legal framework in place regard - ing joint audits. In the context of a MAP or an advance pricing agree - ment, the SIF is, however, authorised, with the con - sent of the person making the request, to conduct an inspection together with the competent authority of the other state if this serves to establish the facts. This is best understood as a co-ordinated “fact-finding” site visit within a dispute prevention or resolution pro - cess, rather than a standalone joint audit programme. In addition, Switzerland does not participate in the OECD’s International Compliance Assurance Pro - gramme or in the EU’s European Trust and Coopera - tion Approach. Where the underlying case has a criminal law dimen - sion, cross-border co-operation may shift from admin - istrative assistance to mutual legal assistance instru - ments, which follow their own statutory bases and safeguards. 6.3 Simultaneous Controls In Switzerland, tax audits are conducted individually by the competent tax authority – either the cantonal tax authorities (for income and capital taxes) or the SFTA at the federal level for withholding taxes and stamp duties.
These audits examine compliance with Swiss law and do not involve foreign tax authorities directly in the Swiss audit process itself. Switzerland can pro - vide tax-relevant information to foreign tax authori - ties that request it and exchange information that may be relevant to their audits or tax assessments. The prevailing framework is treaty-based and is applied on a discretionary, case-by-case basis as opposed to through a dedicated domestic “simultaneous audit programme”. Swiss domestic law does not contain a standalone regime tailored to simultaneous audits and “enhanced programmes” as in the EU/DAC7 sense. Instead, cross-border co-ordination is typically chan - nelled through the standard administrative assistance framework. In this case, the Swiss Federal Tax Admin - istration acts as the competent authority and formal communication gateway. 6.4 International Compliance Assessment Programme (ICAP) Switzerland does not participate in the OECD ICAP or similar multilateral voluntary risk assessment pro - grammes. 7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing Unilateral Rulings Switzerland has a long-standing practice regarding the issuance of unilateral rulings. This practice includes the issuance of unilateral transfer pricing rulings. With respect to corporate income tax, cantons have the authority not only to assess cantonal and munici - pal taxes but also federal corporate income taxes. This means that the cantons can issue advance (tax) rul - ings not only regarding cantonal and municipal taxes but also regarding federal income taxes. However, the SFTA still exercises an important supervisory function over the cantons and can also intervene in individual cases. In practice, the SFTA is becoming increasingly involved in discussions, especially in large transfer pricing cases. It should be noted that it is important to provide the competent tax administration with comprehen -
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