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Swiss Tax Disputes Resolved Quickly In 2018: Report

by Ulrika Lomas,, Brussels

06 December 2019

Switzerland has released a report on its efforts to resolve tax disputes, noting that the average time to complete mutual agreement procedure cases was 13 months in 2018, significantly below that required under the BEPS minimum standards.

According to the State Secretariat for International Finance, those that involved transfer pricing issues –  the attribution of profits to a permanent establishment or the determination of profits between affiliated companies – took 17 months on average, compared with 12 months for other cases.

Under Action 14 of the OECD's BEPS project, countries are required to bring the time taken to resolve disputes under MAP to no more than 24 months on average.

According to the report, in 2018, 70 mutual agreement procedure cases concerning transfer pricing were launched and 33 cases were closed. The inventory of cases at December 31, 2018, stood at 152. The majority of cases in progress in 2018 concerned companies in European countries (62 percent), followed by Asian countries (20 percent), and those on the American continent (17 percent). The majority of the cases "concern initial adjustments of the taxable base of less than CHF20m," it said.

In 2018, there were 87 requests for advance pricing agreements and 62 were concluded, bringing the inventory to 192 at the end of 2018, up from 167 at the end of 2017.

Some APA matters were concluded in as little as one month, the report said, but the average completion time for APAs which were closed in 2018 was 29 months. This is down on the 2017 figure of 32 months.

The aforementioned figures are in relation to mutual agreement procedure cases and advance pricing agreement cases that were launched after January 1, 2016. It was agreed as part of the OECD BEPS project that follow-up reporting on countries' efforts to meet the dispute resolution minimum standard should begin prospectively. That said, Switzerland also reported figures for cases that were initiated before January 1, 2016. For both categories of cases, the average completion time was 22 months – still below that required under the BEPS minimum standard.

TAGS: compliance | tax | business | double tax agreement (DTA) | tax compliance | Organisation for Economic Co-operation and Development (OECD) | agreements | transfer pricing | Switzerland | revenue statistics | Europe | BEPS

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