02 October 2017
On 29 September 2017 the Federal Council adopted the Ordinance on the International Exchange of Country-by-Country Reports (CbCR) of Multinationals. The Ordinance will come into force on 1 December 2017. Therefore and without referenda on the MCAA and the Federal Act on the International Automatic Exchange of CbCR until 5 October 2017, voluntary filing of CbCR for the tax year 2016 will be possible for Swiss-based Multinationals from 1 November 2017.
The OECD base erosion and profit shifting project (BEPS) includes in action 13 one of its global minimum standards, the International Automatic Exchange of Country-by-Country Reports with quantitative as well as qualitative data of MNE with an annual consolidated turnover of EUR 750 million or more (observation base FY2015 for FY2016 reports). Switzerland adopted this minimum standard by having signed the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports of 27 January 2016 and having issued the Federal Act on the International Automatic Exchange of Country-by-Country Reports on 16 June 2017. However, “timing” for the actual application of standard by Switzerland and Swiss MNE remains or remained difficult as it is generally expected that a first International Automatic Exchange of CbCR based on FY2016 will actually be exchanged until end of June 2018.
Without the referendum being called until Thursday, 5 October 2017 the agreement and the act can enter into force in December 2017. Filing of CbCR will thereby become mandatory for the first time from the tax year 2018 onwards and the exchange of CbCR between Switzerland and its partner states who signed the MCAA as well will therefore take place mandatory from 2020 onwards.
To enable Swiss-based and only Swiss-based companies to meet with the generally expected earlier exchange of CbCR from the tax year 2016 onwards, the Ordinance and in particular the act foresee voluntary submission of CbCR for tax periods before 2018. These reports can be transmitted by the Federal Tax Administration (FTA) based on the MCAA on the Exchange of CbCR to partner states from 2018 onwards.
The Federal Tax Administration has published guidance on how and when to submit FY2016 CbCR. Accordingly, Swiss MNEs can submit its CbCR from 1 November 2017 until the end of a period of twelve months after the end of the financial year of the group.