The BEPS Action Plan contains 15 Actions. There is an obligation to implement (minimum standards) with regard to combating harmful tax practices and the spontaneous exchange of information on advance tax rulings (Action 5), the inclusion of abuse clauses in double taxation agreements (Action 6), country-by-country reporting (Action 13) and the dispute resolution mechanisms (Action 14). The implementation of the minimum standards is regularly reviewed by the Inclusive Framework on BEPS.
BEPS Action 5
Counter harmful tax practices more effectively, taking into account transparency and substance
- The Federal Act on Tax Reform and AHV Financing (TRAF), which entered into force on 1 January 2020, abolished tax regimes that were no longer internationally recognised and introduced new, internationally accepted rules.
- The spontaneous exchange of information on advance tax rulings has been in force in Switzerland since 1 January 2018.
- The responsible body (FHTP) at the OECD reviews regimes at regular intervals and publishes the results in a progress report (cf. last update of July 2022).
- The Inclusive Framework on BEPS has reviewed the implementation of the minimum standard every year since 2017. Switzerland began to implement the international standard with the start of the spontaneous exchange of information on tax rulings from 1 January 2018. The current 2020 Peer Review Report makes two recommendations for Switzerland in relation to late exchanges.
BEPS Action 6
Prevent treaty abuse
The provisions to prevent treaty abuse and to improve the resolution of disputes (see BEPS Action 14 below) will be introduced either via the multilateral agreement or in the context of the negotiation of double taxation agreements (DTAs).
The annual monitoring of the implementation of the minimum standard in line with BEPS Action 6 was launched in 2018 and an initial review report was published in early 2019. The monitoring is based on the revised Terms of Reference published of April 2021.
BEPS Action 13
The multilateral agreement, the law and the ordinance on the exchange of county-by-country reports entered into force in December 2017. In Switzerland, the submission of country-by-country reports has been mandatory since the 2018 tax year. The first regular exchange took place in 2020.
Since 2017, the Inclusive Framework on BEPS has reviewed the implementation of the minimum standard set out in BEPS Action 13 on an annual basis. The review reports on Switzerland have not identified any deficiencies to date (see reports from 2018, 2019, 2020, 2021, 2022).
BEPS Action 14 (Improving effectiveness of dispute resolution mechanisms)
Within the scope of Action 14, Switzerland has undertaken to meet the 17 elements of the minimum standard aimed at improving the effectiveness of dispute resolution mechanisms. The minimum standard pursues three aims: 1) ensuring that the mutual agreement procedure obligations under double taxation agreements (DTAs) are carried out in good faith and that disputes leading to a mutual agreement procedure are resolved in a timely manner; 2) ensuring that administrative processes to prevent and resolve DTA disputes in a timely manner are effectively implemented; and 3) ensuring that taxpayers are able to use the mutual agreement procedure when they are entitled to do so. Switzerland largely meets the elements of the Action 14 minimum standard and plans to make the necessary changes.
The monitoring of the implementation of minimum standard in line with BEPS action 14 was launched with the publication of the documents relevant for the review of the minimum standard in October 2016.
The first stage of the review started for Switzerland in December 2016 and the first peer review report on Switzerland was published by the OECD in September 2017. The overall results of this report are positive.
The second stage of the peer review of Action 14 aims to follow up on the Actions implemented by countries following the findings of the first stage of the peer review. For Switzerland, few changes are required to meet all of the elements of the minimum standard. The report on the second phase of the peer review of Switzerland was published in 2019.
It is currently being examined whether and how the minimum standard and the review based on it should be adapted.
Last modification 20.12.2022