SWITZERLAND Law and Practice Contributed by: René Matteotti, Monika Bieri, Daniel Schönenberger and Manuel Ulrich, Tax Partner AG
7.5 APA Application Deadlines The application for an APA procedure can be filed at any given time. 7.6 APA User Fees Under current practice, APA procedures are free of charge. However, the implementation costs in con - nection with a mutual agreement can, in individual cases, be charged to the taxpayer (Article 23, Federal Law on the Implementation of International Agree - ments in the Tax Field). 7.7 Duration of APA Cover In practice, an APA will cover three to five years. However, Switzerland does not have specific time limitations that an APA may or may not cover. Rather, the time period to be covered by an APA has to be decided depending on the characteristics of the case at hand and is subject to negotiations. Hence, the duration is typically a trade-off between administra - tive/economic reasoning and uncertainty concerning the possible future development of the transactions that are the subject of the APA. 7.8 Retroactive Effect for APAs Basically, unilateral rulings cannot have retroactive effect, as ruling requests can only be accepted if they concern future affairs. However, as bilateral and multilateral APAs are based on the MAP provision of the respective tax treaty, the aforementioned restriction does not apply. Hence, APAs can, depending on the involved countries, have retroactive effect. However, the retroactive reach is limited to ten years by Swiss domestic law. In prac - tice, Switzerland seeks to limit the retroactive effect of APAs to five years. The limiting factor in practice is often the legislation in the country of the counterparty, as only certain foreign tax authorities allow a roll-back period.
sive documentation to keep the tax administration informed regarding the underlying facts of the uni - lateral transfer pricing ruling at all times, as the tax administration could challenge the validity of the ruling if the relevant facts have not been fully disclosed or new developments not communicated. Once a rul - ing has been granted, the facts on which it is based must be continuously monitored and changes must be identified, analysed and, if necessary, reported to the tax authorities. Advance Pricing Agreements In Switzerland, advance pricing agreements (APAs) are available. APAs have become a favoured option for Swiss-based international groups with complex or high-volume transactions. In practice, the procedure starts with a presentation of the facts and a formal request to the SIF, the competent authority in Swit - zerland. In 2023, 77 APA proceedings were opened, and 75 of the 308 pending APA proceedings have been closed. The SIF has published guidance on APAs. 7.2 Administration of Programmes With regard to bilateral and multilateral APA proce - dures, the competent authority in Switzerland is the SIF. Concerning unilateral transfer pricing rulings for cor - porate income tax purposes, the cantonal tax admin - istrations and the SFTA will be the competent authori - ties. 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures Since the SIF is also the competent authority for mutual agreement procedures (MAPs), co-ordination between APA procedures and MAPs is ensured. 7.4 Limits on Taxpayers/Transactions Eligible for an APA In principle, the APA programme is open for all taxpay - ers that engage in cross-border intra-group transac - tions.
257 CHAMBERS.COM
Powered by FlippingBook