SWITZERLAND Law and Practice Contributed by: René Matteotti, Monika Bieri, Daniel Schönenberger and Caterina Colling-Russo, Tax Partner AG
13. Controversy Process 13.1 Options and Requirements in Transfer Pricing Controversies General Transfer pricing issues can generally be raised by the tax administration in the course of ordi - nary tax assessments or in the course of audits. For the transfer pricing controversy process, whether a cantonal tax administration or the SFTA raised the issue of transfer pricing has to be differentiated. While the cantonal tax admin - istrations raise this issue in the context of cor - porate income tax, the SFTA may also challenge transfer pricing with regard to withholding tax, stamp duty or VAT. As will be shown, taxpayers may challenge the results of a tax assessment or of an audit in an administrative objection proceeding before bringing the case to court. As regards the selec - tion of the courts, the taxpayer does not have options since the competent courts are deter - mined by law. Corporate Income Tax Transfer pricing adjustments affecting corporate income tax have to be discussed with the can - tonal tax administrations, as they are the com - petent authorities to assess and levy corporate income tax at cantonal and federal level. If a tax administration has already issued an assess- ment or a decision, a formal objection can be lodged with the tax administration itself within 30 days. The tax administration will then have to evaluate the material objections and render a new decision. The tax administration’s second decision can be appealed before court, again within a 30-day deadline. Generally, each canton provides two
in January 2024, also covering questions and answers in connection with intra-group loans, making reference to the OECD Transfer Pricing Guidelines. Finally, reference is made to the safe haven interest rates and safe haven calculation regarding thin capital mentioned in 11.1 Transfer Pricing Safe Harbours . 12. Co-Ordination With Customs Valuation 12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation Switzerland levies VAT on imported goods (import tax) of 8.1%, where the tax is assessed on the respective consideration. The import tax is levied by the Federal Customs Administration, which acts, like the SFTA, as an independent administrative body of the federal government. Despite the fact that the SFTA and the Federal Customs Administration act independently, the administrations are entitled and encouraged to exchange relevant information between them - selves and with other interested administrative bodies. The information exchange has massively increased within the past couple of years, which is mostly due to improved electronic systems, allowing a comprehensive and steady data flow. Hence, transfer pricing adjustments should always be considered for import tax purposes, as well. Regarding customs duty, no adjustment is generally required as the customs duty itself is based on weight and not on monetary value. It is to be noted that Switzerland has abolished levying customs duty on industry products as of 1 January 2024.
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