SWITZERLAND Law and Practice Contributed by: Philippe Nordmann, Marion Bähler, Dario Glauser, Christian Hagen and Samuel Lieberherr, Walder Wyss Ltd
other related parties. The Swiss Federal Tax Authorities publish, on an annual basis, safe- haven interest rates. Higher or lower interest rates may be applied if it can be proved that they are on arm′s length terms. 5.7 Anti-Evasion Rules Swiss law does not provide for specific anti-eva - sion rules. Based on Swiss law and decisions by the Swiss Federal Supreme Court, the following two rules have been developed. • Legal entities are taxable at the registered seat or the place of effective management. • Arrangements may be disregarded if: (a) the taxpayer’s legal form appears unusual or unsuitable for its economic goal; (b) the legal form appears to have been chosen arbitrarily and only to achieve tax savings; and (c) the legal form leads to tax savings. 5.8 Tariffs Switzerland maintains a relatively liberal trade regime, characterised by very low average tar - iffs on industrial goods but comparatively higher protection for specific sectors – most notably agriculture. As a member of the European Free Trade Association (EFTA), Switzerland partici - pates in numerous free trade agreements, which significantly reduce or eliminate tariffs with part - ner countries. On 1 January 2024, Switzerland abolished tar - iffs on nearly all industrial goods, regardless of country of origin. This reform applies to prod - ucts classified under chapters 25–97 of Annex 1 to the Swiss Customs Tariff Act, including machinery, electronics, automobiles and parts, pharmaceuticals and consumer goods such as clothing, furniture and sports equipment. The removal of tariffs on industrial goods was
introduced to reduce costs for businesses and consumers, simplify customs procedures, and support Switzerland’s export-driven economy. It positions Switzerland among the world’s most open markets for industrial imports. In contrast, and as in most European countries, tariffs remain comparatively high on agricultural goods. These measures are intended to shield domestic farmers and support broader policy objectives such as food security, the preserva - tion of the rural landscape and the continuation of traditional farming practices. Many agricultur - al tariffs are accompanied by tariff rate quotas, allowing limited imports at reduced rates while imposing higher duties on quantities exceeding the quota. Switzerland has bilateral agreements – particu - larly with the European Union – that eliminate most tariffs on industrial goods, though agricul - tural trade is typically excluded or only partially liberalised. In addition, Switzerland has conclud - ed free trade agreements via EFTA with over 40 countries, including Canada, South Korea and Indonesia, offering preferential tariff treatment on a wide range of products. In addition to tariffs, imports into Switzerland are subject to VAT. See 5.2 Taxes Applicable to Businesses for the applicable VAT rates. International pressure, especially within WTO negotiations and in trade talks with partners like Mercosur, has intensified calls for Switzerland to further liberalise its agricultural market. Domesti - cally, there is also growing political debate about aligning tariff preferences with environmental and labour standards, reflecting evolving soci - etal priorities around sustainability. Although recent US tariff increases have added external pressure – particularly affecting high-value sec -
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