Transfer pricing – comprehensive policy paper of the tax administration

The arm’s length principle is explained in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Although not legally binding, the Swiss tax authorities and courts refer to these and apply them as a source for the interpretation of the arm’s length principle.

Recently, the Swiss Tax Conference, to which all cantonal tax administrations and the Federal Tax Administration (FTA) belong, published a comprehensive policy paper on transfer pricing for the first time. 

Based on the OECD Transfer Pricing Guidelines, the topics of comparability analysis, intangible assets, intra-group services and financial transactions are discussed. The publication also deals with the arm’s length principle in Swiss tax law and in cross-border relationships as well as the various methods for determining transfer prices. In addition, the documentation obligations and procedural aspects in connection with the primary adjustment and counter-adjustment are dealt with. It should be noted that the publication is limited to the treatment of corporate income and withholding tax.

The paper on transfer pricing published by the tax authorities confirms the application of the OECD Transfer Pricing Guidelines as an interpretative aid and the increasing focus of the Swiss tax authorities on transfer pricing issues. The exchange of goods and services between related parties raises various tax issues that should be clarified upfront.

Grant Thornton Switzerland/Liechtenstein will be pleased to support you as a competent partner in the implementation of intragroup transfer pricing. We look forward to hearing from you.