New mandatory international OECD standards with regard to corporate taxation, including for Switzerland

Bern, 05.10.2015 - Switzerland supports international efforts to achieve greater transparency and a level playing field with regard to the taxation of multinationals. As a member of the OECD, it actively participated in the base erosion and profit shifting (BEPS) project, the final outcomes of which were published today. The Federal Council has instructed the Federal Department of Finance (FDF) to deliver analyses and proposals for implementing the outcomes.

The final outcomes of the BEPS project that were published today by the Organisation for Economic Co-operation and Development (OECD) supplement the first reports of September 2014. They officially complete two years of work on the project. All 13 reports will be presented at the G20 Finance Ministers and Central Bank Governors Meeting in Lima on 8 October, and then at the G20 Heads of State and Government Summit in Antalya on 15 and 16 November 2015.

In general, the project outcomes will allow for better coordination of international tax law rules and make it possible to close the gaps that multinationals could previously use for aggressive tax planning purposes. Moreover, the participation of the largest financial centres will lead to the creation of a level playing field for Switzerland and its competitors.

Some outcomes are regarded as new minimum standards with which all G20 and OECD member states undertake to comply. The minimum requirements concern country-by-country reports, criteria for taxing intangible property (patent boxes), the spontaneous exchange of information on advance tax rulings, access to the mutual agreement procedure for resolving disputes and the inclusion of anti-abuse clauses in double taxation agreements (DTAs). The OECD will set up control systems to monitor member states' compliance with the minimum requirements. Other BEPS outcomes are in the form of recommendations, e.g. rules on restricting the deductibility of interest payments and rules to neutralise the effects of hybrid mismatch arrangements.

The third series of corporate tax reforms currently under way in Switzerland already takes account of certain BEPS outcomes. For example, provision is made for a standard-compliant patent box (or royalty box), as well as the abolition of tax regimes criticised internationally. With regard to the exchange of information on tax rulings, Switzerland will create the necessary legal basis with the approval of the OECD/Council of Europe multilateral administrative assistance convention. The legal foundations for implementing country-by-country reports are also being prepared. This country-by-country reporting will provide a complete overview of multinationals' global allocation of income and taxes paid. Regarding anti-abuse clauses in DTAs, Switzerland will take account of the OECD's work and decide whether it will make the necessary adjustments multilaterally or bilaterally. Finally, concerning the recommendations that are not in the form of minimum standards, the Federal Council has instructed the FDF, in collaboration with the cantons and business circles, to analyse the amendment of Swiss corporate tax law in the light of international developments.