SWITZERLAND Law and Practice Contributed by: Joseph Merhai, Thomas Pasquier and Laurent Schenker, Aegis
Aegis Rue du Général-Dufour 20 1204 Geneva Switzerland Tel: 022 703 51 00 Email: info@aegis.ch Web: aegis.ch
1. Sources and Principles 1.1 Domestic Sources of International Tax Law Swiss international tax law is primarily based on Switzerland’s network of double taxation agreements (DTAs) and other bilateral or multilateral agreements, as interpreted and applied under Swiss domestic tax legislation, and complemented by administrative practice and case law. Switzerland is a federal state. Taxes are levied at federal, cantonal and communal levels; accordingly, cross-border matters are covered by a combination of federal acts, the relevant cantonal provisions and potential applicable international treaties, depending on the case at hand. Swiss international tax law also includes domestic conflict rules and unilateral mechanisms to eliminate international double taxation. In practice, administra - tive guidance (including circulars and safe harbour practices, notably in areas such as thin capitalisation and interest rates in intra-group financing) and the case law of the Swiss Federal Supreme Court (SFSC) are key for the interpretation and application of these rules. As of March 2026, Switzerland has DTAs with over 100 countries, mainly covering taxes on income and wealth/capital. A limited number of DTAs do not cover wealth/capital tax. Switzerland also has a limited trea - ty network for inheritance and estate taxes (currently eight agreements). In addition, the cantons may con - clude treaties with foreign states in areas falling within their areas of competency. In practice, a limited num -
ber of cantonal agreements exist in international tax matters, notably in relation to international inheritance taxation or gifts made to public-benefit institutions, and the taxation of cross-border workers. With respect to internationally recognised standards, OECD publications, reports and guidelines are com - monly used as an interpretative tool by administra - tive authority and courts, especially where Swiss law applies treaty concepts (eg, in transfer pricing). 1.2 Hierarchy of Sources Switzerland applies a monist approach, meaning that, once validly ratified, international law (in particular, DTAs) forms part of the domestic legal order and is, as a rule, applied by the Swiss authorities without requir - ing a separate act of implementation. According to the Swiss Federal Constitution (SFC), both the Confederation and the cantons must respect international law, including treaties and DTAs. The Constitution also provides that the SFSC and other authorities are required to apply both international law and federal laws. Treaty provisions are applied directly to the extent they are sufficiently clear and precise (self-executing); where this is not the case, implementing legislation is required. As a rule, domestic law is interpreted in a treaty-con - form manner; where a conflict cannot be resolved by interpretation, international law generally prevails. This reflects the obligation to interpret treaties in good faith (pacta sunt servanda, Article 26 of the Vienna Conven - tion on the Law of Treaties), while Swiss case law rec - ognises limited exceptions in specific constellations.
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