SWITZERLAND Law and Practice Contributed by: René Matteotti, Monika Bieri, Daniel Schönenberger and Caterina Colling-Russo, Tax Partner AG
tion contrary to the DTA or if the requested infor - mation could not be obtained by the Swiss tax authorities under domestic tax procedural law. Practice shows that foreign tax authorities are increasingly submitting requests for adminis - trative assistance to Switzerland when auditing transfer prices, thereby requesting very compre - hensive information and data. In this context, the Federal Tax Court (FTC) has – correctly in itself – decided that requested information for the veri - fication of transfer prices must be exchanged. In doing so, the FTC referred in particular to the explanations of the OECD TPG in Chapter V regarding documentation (in the 2010 version). At the same time, the FTC stated that the OECD TPG are not binding for the court and merely represent an interpretative instrument. This means in the context of international exchange of information in tax matters that the provision of administrative assistance is not limited to the information required to apply a specific trans - fer pricing method. It is sufficient that there is merely a reasonable connection between the information requested and the facts described in the request for administrative assistance. As a result, the administrative assistance provided by Switzerland in transfer pricing cases can be very comprehensive and information is also transmit - ted that would not be required for the application of the methods defined in the OECD TPG. Spontaneous Exchange of Information on Specific Tax Rulings Switzerland has implemented the spontane - ous exchange of information on tax rulings into domestic law as of 1 January 2017. In particu - lar, it has also committed to the spontaneous exchange of unilateral rulings on transfer pric - ing and permanent establishments with the state of the direct parent, the state of the group top
company and, if available, the state of the coun - terparty of the transaction. Automatic Exchange of Information on Country-by-Country Reports (CbCR) As of 1 January 2017, Switzerland also signed the Multilateral Competent Authority Agree - ment on the Exchange of Country-by-Country Reports (MCAA CbCR). However, the MCAA CbCR will not be applicable between Switzer - land 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 the context of a MAP or an advance pricing agreement, the SIF is, however, authorised, with the consent of the person mak - ing the request, to conduct an inspection togeth - er with the competent authority of the other state if this serves to establish the facts. There is no legal framework in place regarding joint audits. Also, Switzerland does not participate in the OECD’s International Compliance Assurance Programme or in the EU’s European Trust and Cooperation Approach. 7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing Unilateral Rulings Switzerland has a long-standing practice regard - ing the issuance of unilateral rulings. This prac - tice also includes the issuance of unilateral transfer pricing rulings. With respect to corporate income tax, cantons have the authority not only to assess cantonal and municipal taxes but also federal corporate
352 CHAMBERS.COM
Powered by FlippingBook