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Since the launch of the OECD/G20 BEPS project, multinational companies have been operating in an environment of unprecedented complexity. The rising volume and variety of intercompany transactions and transfer pricing regulations, coupled with increased tax authority collaboration across borders, presents both risks and opportunities.
This article provides some information on the latest transfer pricing issues and developments worldwide that may affect your business.
The practice change is becoming effective as of the tax period 2018 and will affect the fiscal deduction of non-specified asset management costs, exceeding CHF 6'000 per annum, for securities deposits with a value in excess of CHF 2 million.
Swiss Tax Reform Proposal 17: Swiss Federal Council issues draft legislation and launches Consultation Procedure
On 6 September 2017 the Swiss Federal Council issued the draft legislation for the so-called Swiss Tax Reform Proposal 17 (STR 17, formerly known as Swiss Corporate Tax Reform III or CTR III). This proposal is basically in line with the recommendations of the respective Steering Committee issued in June of this year. The issued proposed legislation including the proposed regulations for patent boxes and the Explanatory Report to the STR 17 provide various details as to the application and mechanism of the proposed replacement measures.
The world of work is evolving at an unrelenting pace. Certain trends are disrupting business areas such as talent, technology and the physical workplace itself, which in turn is changing the way companies operate.
The Swiss Federal Tax Administration (SFTA) recently changed its position on the treatment for Swiss transfer stamp tax purposes of domestic single-investor funds held by FINMA regulated non-life insurers. They shall now be deemed exempt investors according to article 17a paragraph 1 letter b of the Swiss stamp tax act.
This practice change as well as actions to be taken by Swiss securities dealers and non-life insurers are addressed in this article.
On 4 August 2017, the Treasury Department and the Internal Revenue Service (IRS) issued Notice 2017-42 providing relief from certain aspects of the final and temporary section 871(m) regulations and their impact on the timing of the QI periodic review.
Introduced to prevent non-U.S. persons from using derivative instruments to avoid U.S. withholding tax, many industry groups commented that compliance with section 871(m) required significant enhancements to withholding and reporting applications. In response, the Treasury Department and the IRS published Notice 2016-76 in December 2016, which provided for the phased-in application of certain provisions of 871(m). Notice 2017-42 further extends the phase-in period.
Via Revenue Procedure 2017-15, the Internal Revenue Service (IRS) released an updated qualified intermediary (QI) agreement. Effective from 1 January 2017, the agreement reminded financial institutions of the ongoing challenges associated with QI compliance.
Further to the partial revision of the current Swiss Value Added Tax (VAT) Law (VAT-L), foreign domiciled companies operating in the distance selling business will be equated with companies domiciled in Switzerland.
The Common Reporting Standard (CRS) released by the OECD requires Reporting Financial Institutions (FIs) to obtain the Tax Identification Number (TIN) of certain clients. This confronts FIs with a number of practical challenges. The main areas of concern are the validation of TINs obtained and how to deal with clients who claim being unable to provide a TIN. Unfortunately, regulators do not address this topic in detail. Thus, Reporting FIs should not only consider regulatory requirements but also operational and strategic aspects when developing policies and implementing the necessary processes.
The US Treasury Department and Internal Revenue Service (IRS) have been busy providing new guidance for foreign financial institutions (FFIs), qualified intermediaries (QIs) and qualified derivatives dealers (QDDs) in the last weeks.
Since BEPS, multinational companies are operating in an environment of unprecedented complexity. The rising volume and variety of intercompany transactions and transfer pricing regulations, coupled with increased tax authority collaboration across borders present both risks and opportunities. Our transfer pricing updates will provide you with the latest transfer pricing issues and developments worldwide that may affect your business.