Harmful Tax Practices – 2023 Peer Review Reports on the Exchange of Information on Tax Rulings

1146. Switzerland can legally issue the following four types of rulings within the scope of the transparency framework: (i) preferential regimes;1 (ii) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (iii) permanent establishment rulings; and (iv) related party conduit rulings.

1147. For Switzerland, past rulings are any tax rulings within scope that are issued on or after 1 January 2010 until 31 December 2016, provided they were still in effect as at 1 January 2018. For Switzerland, future rulings are any tax rulings within scope that are issued on or after 1 January 2017, provided they are still in effect on or after 1 January 2018.

1148. In the prior year’s peer review reports, it was determined that Switzerland’s undertakings to identify past and future rulings and all potential exchange jurisdictions were sufficient to meet the minimum standard. In addition, it was determined that Switzerland’s review and supervision mechanism was sufficient to meet the minimum standard. Switzerland’s implementation remains unchanged, and therefore continues to meet the minimum standard.

1149. Switzerland has met all of the ToR for the information gathering process and no recommendations are made.

1150. Switzerland has the necessary domestic legal basis to exchange information spontaneously. Switzerland notes that there are no legal or practical impediments that prevent the spontaneous exchange of information on rulings as contemplated in the Action 5 minimum standard.

1151. Switzerland has international agreements permitting spontaneous exchange of information, including: (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”).2 The necessary domestic and international legal framework for spontaneous exchange of information entered into force on 1 January 2017, allowing for exchanges from 1 January 2018.

1152. In the prior years’ peer review reports, it was determined that Switzerland’s process for the completion and exchange of templates met all the ToR, except for timely exchange of information on past and future rulings (ToR II.B.6).

1153. In the prior year peer review report, it was determined that Switzerland’s process for the completion and exchange of templates were sufficient to meet the minimum standard.

1154. For the year in review, the timeliness of exchanges is as follows:

1155. Similar to the prior year’s report, Switzerland encountered delays with the exchange of information on future rulings due to legal impediments and modernisation of the SEOI platform. Switzerland has further improved its internal processes by improving its IT system, including an automatic periodical approval of rulings on the SEOI platform. Compared to the prior year’s peer review report, the number of delayed exchanges has decreased significantly (from 32 to two). For the two delayed exchanges, the time of the delay was relatively short. Furthermore, peer input has indicated the information was received timely. Therefore, the prior year’s recommendation is removed.

1156. Switzerland has the necessary legal basis for spontaneous exchange of information, a process for completing the templates in a timely way and has completed all exchanges. Switzerland has met all of the ToR for the exchange of information process and no recommendations are made.

1157. The statistics for the year in review are as follows:

1158. In the prior years’ peer review report, it was determined that Switzerland’s information gathering and exchange of information processes for matters related to intellectual property regimes6 were sufficient to meet the minimum standard. Switzerland’s implementation in this regard remains unchanged and therefore continues to meet the minimum standard.

[1] OECD (2021), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, http://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.

[3] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241190-en.

[2] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://doi.org/10.1787/9789264115606-en.