Worldwide transfer pricing reference guide 2014

Switzerland (continued)
Documentation requirements
There are no specific documentation requirements. However, if challenged by the SFTA, the taxpayer has to demonstrate that the
transfer prices applied were based on sound economic and commercial reasoning on an arm’s length basis.
Although it can be concluded from the Federal Direct Tax Act that in principle, upon request of the Swiss tax administration, a taxpayer
should prepare transfer pricing documentation, there is little guidance on the structure of such documentation.
However, based on the references to the OECD Guidelines in the 1997 Circular Letter, OECD-compliant documentation in one of the
official languages of Switzerland is accepted by the SFTA. Due to the lack of sufficient independent comparable companies in the Swiss
market, pan-European comparables are usually accepted.
Documentation deadlines
There are currently no special provisions for documentation deadlines.
Statute of limitations on transfer pricing assessments
The general rule provides for up to 10 years from the end of the tax year, if new facts or circumstances are discovered by the tax
administration.
Return disclosures/related party disclosures
There are no formal related party disclosure requirements. However, in the case of a tax audit or request from competent authorities,
the taxpayer must provide the requested information to a reasonable extent.
Transfer pricing-specific returns
There are no specific returns which have to be filed for transfer pricing purposes.
Frequency of tax audit and transfer pricing scrutiny by the tax authority
Generally, the SFTA is increasing its scrutiny of transfer pricing arrangements. In particular, the remuneration for transfers of
intangibles, services, intercompany financing as well as business restructurings are being scrutinized more often than in the past.
In current tax audits, transfer pricing is often reviewed as part of an audit; however, the risk of any reassessment is low, assuming that
transfer prices have been appropriately set and documented.
APA opportunity
Despite the fact that there are no specific formal APA procedures, tax rulings are a common practice in Switzerland. Hence, unilateral
APAs can be obtained in due time and with reasonable efforts. Regarding multilateral APAs, the SFTA has already participated in several
cases. APA procedures are carried out in accordance with the applicable rules for mutual agreement procedures. All Swiss signed double
tax treaties usually contain a provision on the mutual agreement procedure, under which the SFTA can launch an APA process.
Expected reaction to OECD Report on BEPS
Switzerland is supporting the BEPS initiative and is present in various working party groups of the OECD. However, no immediate action
is expected due to BEPS in the near/mid-term. While Switzerland is in the process of adapting certain tax regimes and ruling practices
which are considered harmful tax practice by some countries, these developments started before the BEPS initiative. Also, the Swiss
competent authorities expect the number of MAPs to increase substantially.
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