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On 3 July 2018, the OECD released a discussion draft on the transfer pricing aspects of financial transactions. This discussion draft is part of Actions 8-10 of the Base Erosion and Profit Shifting (“BEPS”) project. It contains additional guidance for future inclusion within the OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“OECD Guidelines”).
We are hosting a live webcast on Wednesday, 12 September 2018 from 4.00pm to 5.00pm (CET), where we will be discussing case studies covering finance and IP structures and how these structures are affected by the evolving transparency requirements and the increased sensitivity of European and Swiss tax authorities with regard to “aggressive” tax planning.
A new version of Arm's Length Standard has been released. Arm’s Length Standard is a bulletin of transfer pricing developments written by professionals of the member firms of Deloitte. The newsletter covers transfer pricing developments worldwide.
The next five years will be a period of significant technology advancement for professionals working in international tax. It is hard to predict precisely what new lasting developments will emerge, but we can look at current and recent trends to guide our expectations for the future digital landscape and the ways in which this might impact us.
On 25 June 2018, an amendment to Directive 2011/16/EU, commonly referred to as “DAC6”, came into force, which may have significant impact on Swiss entities. DAC6 requires the disclosure of certain cross-border tax planning arrangements by way of a reporting to the local tax authorities. While the rules do not apply in Switzerland directly, Swiss intermediaries may nevertheless be affected if they have operations or otherwise provide services in any EU country. Even purely Swiss intermediaries that serve EU clients should carefully consider the impact of DAC6.
On 6 April 2017, the UK brought in new legislation requiring an individual, trust or company – whether UK resident or not – to correct historic errors in their UK tax affairs relating to income tax, capital gains tax and inheritance tax. A taxpayer can indicate its intention to disclose via HM Revenue & Customs’ (HMRC’s) Worldwide Disclosure Facility web portal until 30 September 2018, with full disclosure being required by 29 December 2018. After that date, the “Failure to Correct” regime will be triggered, with significantly higher penalties applied to any voluntary disclosures.
From 1 January 2019 the new device-independent fee will be collected from households and businesses. It replaces the current device-dependent fee, which will be terminated at the end of 2018.
We are hosting a live webcast on Thursday, 5 July 2018 from 16:00 to 17:00 (CET), where we will be discussing the impact on Swiss companies of the recent EU Directive on Tax intermediaries, which requires mandatory reporting by tax intermediaries of potentially aggressive cross-border arrangement and the automatic exchange of the information by the tax authorities.
New guidelines that allow for deducting equity incentive program expenses in Swiss statutory accounting
The federal tax administration has issued a new circular letter (n° 37A) which confirms current practice of the majority of cantons for the deductibility of equity incentive expenses and is expected to unify the approach of different cantonal tax administrations. This being said, some tax administrations do not agree with certain provisions of the circular letter, notably with the provision related to the deductibility of expenses for shares.
Time is running out for US citizens and green card holders to take advantage of the US government’s Offshore Voluntary Disclosure Program (OVDP) to report previously undisclosed foreign financial assets to the US tax authorities, or file delinquent US foreign information returns.
The US Internal Revenue Service (IRS) announced on 13 March 2018 that the current OVDP that began in 2014 will close on 28 September 2018. The OVDP is an avenue for US taxpayers to resolve past noncompliance relating to undisclosed foreign assets and the failure to file foreign information returns without being subject to criminal prosecution but financial penalties will apply.
In the vote on 10 June 2018 the people of Zurich have decided to eliminate the unequal treatment between pure Zurich intra-cantonal companies (with legal seat as well as real estate in Zurich) and inter-cantonal companies (with legal seat outside the Canton of Zurich and real estate in Zurich). Newly companies with legal seat in Zurich can offset the incurred operating losses from their local Zurich business operations with real estate capital gains tax in Zurich. This offsetting of operating losses with real estate capital gains tax in Zurich so far was only allowed for inter-cantonal companies with business activities in different Cantons based on the jurisprudence of the Swiss Federal Supreme Court.