SWITZERLAND Law and Practice Contributed by: René Matteotti, Monika Bieri, Daniel Schönenberger and Caterina Colling-Russo, Tax Partner AG
income taxes. This means that the cantons can issue advance (tax) rulings not only regarding cantonal and municipal taxes but also regard - ing federal income taxes. However, the SFTA still exercises an important supervisory function over the cantons and can also intervene in indi - vidual cases. In practice, the SFTA is becoming increasingly involved in discussions, especially in large transfer pricing cases. It should be noted that it is important to provide the competent tax administration with compre - hensive documentation to keep the tax adminis - tration informed regarding the underlying facts of the unilateral 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 ruling has been granted, the facts on which it is based must be continu - ously 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 transac - tions. In practice, the procedure starts with a presentation of the facts and a formal request to the SIF, the competent authority in Switzerland. 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 pro - cedures, the competent authority in Switzerland is the SIF.
Concerning unilateral transfer pricing rulings for corporate income tax purposes, the cantonal tax administrations and the SFTA will be the com - petent authorities. 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 taxpayers that engage in cross-border intra- group transactions. 7.5 APA Application Deadlines The application for an APA procedure can be Under current practice, APA procedures are free of charge. However, the implementation costs in connection with a mutual agreement can, in indi - vidual cases, be charged to the taxpayer (Article 23, Federal Law on the Implementation of Inter - national Agreements 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 cov - er. Rather, the time period to be covered by an APA has to be decided depending on the char - acteristics of the case at hand and is subject to negotiations. Hence, the duration is typically a trade-off between administrative/economic rea - soning and uncertainty concerning the possible filed at any given time. 7.6 APA User Fees
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