SWITZERLAND Law and Practice Contributed by: Joseph Merhai, Thomas Pasquier and Laurent Schenker, Aegis
7.3 Other Forms of International Tax Collaboration This is not applicable in Switzerland.
provide for a different deadline or do not specify any express time limit. In practice, taxpayers are expected to file the request as early as possible. 8.3 Mandatory Binding Arbitration Arbitration is available only where the relevant DTA expressly provides for it. Several Swiss DTAs contain an arbitration clause, under which unresolved issues in a MAP may, after expiry of the treaty-based waiting period, be submitted to arbitration at the taxpayer’s request. Arbitration is therefore not generally available across Switzerland’s treaty network, but only on a treaty-by- treaty basis. In addition, most treaties providing for arbitration exclude it where a court has already ren - dered a decision on the matter. Where arbitration is available and results in a decision, that decision must be implemented through mutual agreement by the competent authorities. Switzerland does not have a separate standalone advance pricing agreement (APA) programme. In practice, however, APAs are available and are gener - ally treated as a specific form of MAP-based dispute prevention in transfer pricing matters. This reflects the broader Swiss approach to transfer pricing. Swiss tax law does not contain a compre - hensive codified transfer pricing regime; instead, the arm’s length principle is applied under general tax law principles, and Swiss tax authorities and courts com - monly rely on the OECD Transfer Pricing Guidelines as the principal interpretative standard. 9. Dispute Prevention 9.1 Advance Pricing Agreements In procedural terms, APAs may be unilateral, bilateral or multilateral, depending on the circumstances. Bilat - eral and multilateral APAs are handled within the MAP framework through the competent authorities. MAPs in the transfer pricing area may be used to determine transfer prices in advance and may, where the facts
8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis Where double taxation has occurred, or there is a risk that taxation not in accordance with an applicable DTA will occur, a taxpayer resident in Switzerland may request the initiation of a mutual agreement procedure (MAP). The legal basis is found primarily in the MAP provision of the applicable DTA, typically correspond - ing to Article 25 of the OECD MTC. In addition, the procedure is governed under Swiss domestic law by Articles 2 et seq of the Federal Act on the Implemen - tation of International Tax Agreements (ITAIA), which entered into force on 1 January 2022. In Switzerland, MAP requests must generally be sub - mitted to the Federal Department of Finance, acting through the State Secretariat for International Finance (SIF). The MAP may concern either the elimination of double taxation that has already arisen or the preven - tion of imminent double taxation. In the transfer pricing area, the MAP framework also serves as the basis for bilateral or multilateral advance pricing arrangements. It should be noted that the MAP is a procedure between the competent authorities of the states con - cerned; the taxpayer is not formally a party to that inter-state procedure, although it is initiated at the tax - payer’s request and the co-operation of the taxpayer plays an important role in practice. 8.2 Application Deadlines Generally, a MAP request must be submitted within three years from the first notification of the action giv - ing rise to double taxation. This reflects the approach of Article 25 of the OECD MTC and is also the posi - tion adopted in many Swiss tax treaties and in Swiss domestic legislation (ie, ITAIA). However, the applicable deadline must always be veri - fied under the relevant treaty. While most Swiss DTAs contain the three-year period, some treaties either
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