Tax and Legal blog
Stay up to date with the latest tax and legal issues and developments that may affect you and your business.
Swiss WHT Reclaims – A recent SFTA practice guidance on the statutory limitations provides clear guidance
The Swiss Federal Tax Administration (SFTA) released a practice guidance on 13 September 2022 covering the refund of Swiss withholding taxes (Swiss WHT) on dividends and the applicable statutory limitations. The publication of the standardized practice is highly welcomed, as it provides clarity on how the SFTA determines the statute of limitations in a refund process.
Public Vote Confirmed Swiss VAT Rate Increase and Rejected the Reform of Withholding Tax – What’s ahead?!
VAT rate changes in Switzerland are quite common, mainly to finance “governmental projects”. The last VAT rate change took place in 2018. Based on our past experiences, we would generally expect the Swiss Federal Tax Administration (“SFTA”) to set transition rules covering both the tax point and resulting invoicing, as well as reporting rules. The key aspects mentioned hereinafter (subject to final publication and confirmation) will have to be considered from VATable persons in Switzerland.
European push to implement Pillar II
On Friday 9 September 2022 the governments of Germany, France, Italy, Spain and the Netherlands issued a joint statement confirming the intention to implement a global minimum tax (“Pillar II”). In essence, the statement mentions that even though EU-wide implementation of Pillar II is preferred (by means of an unanimously adopted EU Pillar II Directive), the countries will move forward with implementation even in the absence of an EU-wide agreement if such is not obtained over the coming weeks. The next ECOFIN meeting where Pillar II is on the agenda is scheduled for 4 October 2022.
Operational tax risk at financial institutions – preventing tax falling through the risk management cracks
A financial institution is faced with a broad range of local and international operational tax matters. Topics such as VAT, stamp tax duty, transfer pricing, tax accounting or tax transparency, just to name a few, have unique mechanisms and specific interactions with operational processes.
A survey conducted during a recent Deloitte FS Tax webinar indicates that, within most financial institutions,
(i) tax subject matters are not under the oversight of a single person or
department, and
(ii) tax risk is not consolidated into the overall risk management framework.
These results show that strong tax risk governance needs to be put in place to ensure that tax risk is not overlooked and such governance should embed a tax control framework.
Building a tax control framework requires the identification and evaluation of risks, notably by considering the following three jurisdictional touchpoints of (i) products, (ii) services and (iii) the client base.
The global minimum tax roadmap: the fog begins to lift
In July 2021, the G7 and the G20 fuelled the OECD Inclusive Framework with the consensus on the introduction of a global minimum tax of 15%. The high pace of policy leads at the OECD continued well into 2022 with the GloBE Framework (Pillar I & II) published in October 2021, the GloBE Rules (Pillar II) in December 2021 and the extensive commentary providing further guidance (March 2022). While the initial momentum provided for ambitious implementation plans, different global crises and the complexity of the implementation work required have slightly stalled progress. However, recent developments have revitalised the domestic efforts to introduce GloBE Rules and various jurisdictions have published their plans recently – among others: Switzerland.
New US Tax identification number requirements create unworkable situations for Qualified Intermediaries
The IRS has recently announced a number of changes related to identification requirements impacting Qualified Intermediaries (QIs). This blog is the first of a two-part series and describes how the current design of the Secure Access Account (SAA), and in particular the request to provide a US Tax identification number to validate the QI’s Responsible Officials identity, would impair the QIs’ capabilities to comply with their electronic reporting obligations through FIRE. The second part of this series, covering QI’s new due diligence challenges linked to their non-US account holders’ US Tax identification number requirement for 1446(a) and 1446(f) purposes, will follow in a separate blog.
Social Security Update: Switzerland Remote Work / Cross border commuters COVID-19 “no-impact” position extended until 31 December 2022. Expansion to all European Economic Area countries and Switzerland
Considering the impact COVID-19 is still having on travel and work arrangements and its consequences in terms of work patterns for cross-border commuters and assignees a-like, the social security authorities of all EEA countries and Switzerland have decided, in the framework of the Administrative Commission’s meeting of this week, to extend the “no-impact” position in view of determining the applicable social security legislation up until 31 December 2022.
Join our Financial Services webinar relating to Operational Tax Risks on 22 June 2022 at 8.30 am CEST
We would like to invite you to our upcoming webinar on operational tax risk governance for the financial services industry on Wednesday 22 June 2022 at 08.30am.
SAP GTS webinar on 7 June - The next generation of global trade automation systems
The next generation of global trade automation has arrived in the new SAP GTS, Edition for HANA (E4H). Are you aware of the new solution and its capabilities? What are the key benefits and implementation options? How can the new system support your transition from e-dec to Passar?
Corporate group financing from Liechtenstein
Liechtenstein as business location
Liechtenstein is a small country in the heart of Europe, which offers a broadly diversified and stable business location with more than 4,800 active companies.
In the last ten years, Liechtenstein has successfully positioned itself as an onshore location for international groups. This can be seen, for example, in the proactive adoption by Liechtenstein of international developments in the tax area as part of its early adopter strategy and in the growing network of double taxation agreements. Nevertheless, Liechtenstein has managed to continue to offer favorable tax planning options in selected areas.