Switzerland Recently Released Position Statement on CbC Reporting
The latest State Secretariat for International Financial Matters (SIF) position statement on the OECD on the Base Erosion and Profit Shifting Project (BEPS Project) was released on 6 February 2015.
With respect to the Guidance on the implementation of transfer pricing documentation and country-by-country reporting, it states:
“In order to adopt guidance on the implementation of the transfer pricing documentation and country-by-country reporting, the OECD took initial decisions on the implementation of the report on the “Guidance transfer pricing documentation and country-by-country reporting” (report published on 16 September 2014).
The aim is to improve fiscal transparency by providing data on multinational groups to the tax authorities. Multinational groups will be required to fill out several forms: a country-by-country report, a master file and a local file. It is important to note that only multinational groups whose consolidated yearly turnover exceeds EUR 750 million must prepare the country-by-country report. The information is for tax authorities. The jurisdictions must treat such information as confidential.
The country-by-country report aims to give an overview of the benefits, taxes and activities of a multinational group for each of the jurisdictions in which it operates (e.g. number of employees, income before income taxes, income tax paid on profit, etc.). The country-by-country report will be prepared by the parent company of the multinational group and provided to the tax authorities of the State in which it is resident. Once a country-by-country report is filed with the tax authorities, it will be exchanged through an instrument for the automatic exchange of information with the tax authorities of those States where the multinational companies are situated. The tax authorities may use the country-by-country report for risk analysis and to check that transfer pricing is applied correctly within multinational groups. However, the tax authorities will not revise and amend the fiscal factors of the taxpayer relying solely on this data. It is only after further and more in-depth investigation governed by the rules of ordinary tax procedure and solely in the event of the tax authorities considering that the rules on transfer pricing have not been applied correctly that the tax authorities could alter the tax status of the taxpayer concerned.
Like all the other 43 countries participating in the BEPS project, Switzerland is committed to following the OECD recommendations regarding transfer-pricing documentation. Switzerland will introduce a legal basis in order to oblige the multinational groups concerned to complete these documents and file them with the tax authorities. Switzerland will also participate in the development of the tools for the automatic exchange of information.”
The complete statement is available here.
Robert Robillard, Ph.D., CPA, CGA, MBA, M.Sc. Econ.
Senior Partner, DRTP Consulting Inc.
514-742-8086; robertrobillard “at” drtp.ca
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