Tax Newsletter Central Switzerland

Pillar 2 – fourth set of administrative guidance

The OECD on June 17 released more guidance on Pillar Two, covering the recapture rule for deferred tax liabilities, cross-border allocation of taxes, profits and taxes in specific structures with flow-through entities, and securitization vehicle treatment. You may find the guidance under the following link: guidance. For further information please also refer to our Pillar Two Nice List. 

BEPS 2.0 Pillar Two – Belgian Pillar Two Compliance notification

In 2023 Belgium officially enforced the Pillar 2 rules. To comply with the requirements, groups in scope of the rules have to register at the Crossroads Bank for Enterprises (Kruispuntbank van Ondernemingen / Banque Carrefour des Entreprises) until mid July 2024. For further information in this regard, please refer to this link.

EU Public Country-by-Country Reporting PwC Tracker

PwC launched a EU Public Country-by-Country Reporting (pCbCR) tracker. The EU pCbCR tracker provides the status of implementation of the EU pCbCR Directive in different EU Member States. It keeps you up to date with the latest EU pCbCR requirements, including reporting thresholds, reporting deadlines and possible penalties. The Tracker is free to access under the following link: PwC’s EU Public Country-by-Country Reporting (pCbCR) Tracker

EU FASTER Directive

EU finance ministers agreed on 14 May in principle to the Faster and Safer Relief of Excess Withholding Taxes (FASTER), a law intended to speed up cross-border withholding tax refund procedures but failed to agree on an update to value-added tax rules because of an objection from Estonia. For further information please refer to our PwC Tax Policy Alerts: (FASTER, ViDA). 

International Tax News

For ongoing updates from the international tax world, we recommend our international Tax News, which you can access at this link.

Model expense regulations

The SSK / CSI has puplished updated model expense regulation and a model template for the car allowance (both valid from May 1, 2024). The model templates can be found at this link.

Investment of OECD minimum tax in location measures (Canton of Zug)

On 16 May 2024, the canton of Zug has published its plans on how to invest the additional funds that are expected to be collected from the OECD minimum taxation (Pillar 2 / QDMTT). The media release (in English) can be found at this link.

The public consultation on the draft law is open for comments until 15 September 2024.

General overview

Zug expects to collect some CHF 200m p.a. (net figure) as a result of Pillar 2 and focuses on three topics to sustain its attractiveness as business location:

1. Social measures (childcare provision, higher cantonal contributions to private schools and investment in housing to keep living and working space attractive) – the expected annual investment costs into this basket amount to some CHF 46m
2. Infrastructure and innovative projects (Blockchain Zug Joint Research Initiative, ETH Learning Factory Zug etc.) – the expected annual investment costs into this basket amount to some CHF 16m
3. Location Development Act (system of direct subsidies to companies for sustainability and innovation) – the annual investment costs into this basket shall amount to max. CHF 150m.

The public consultation launched focuses on basket 3, i.e. the draft Location Development Act. The main aspects are summarized in the following. 

Location Development Act (‘LDA’)

The LDA proposal currently foresees the following main aspects:

• Direct financial contribution to companies shall likely be in the form of subsidies (as opposed to tax credits). However, this aspect will be analyzed in further detail by the cantonal authorities;
• The LDA only stipulates the basics of the subsidy system while the corresponding ordinance contains more detailed provisions. This legal framework shall allow Zug to adapt the subsidy system going forward if needed (e.g., in view of a potentially changing international framework);
• Max. subsidy per company will be based on 1.5% of the company’s average taxable income (of the last three tax periods);
• De minimis rule: subsidies will only be granted to companies, which had an average annual taxable income of CHF 500k (which would give rise to a subsidy of at least CHF 7.5k);
• Max. overall cantonal subsidy of CHF 150m p.a. for all subsidy applications. This cantonal cap shall be applicable for the years 2026-2028. Thereafter, the cantonal government will determine the annual cap in collaboration with the cantonal parliament;
• Three incentive categories: innovation (input side) / innovation (output side) / ESG measures;
• For the calculation of the max. annual subsidy per company, the three incentive categories will be summed up;
• The draft law (see in particular pages 47 ff. of the explanatory report and draft law) contains more specifics around the metrics that are to be used within the three incentive categories.

Investment of OECD minimum tax in location measures (Canton of Basel-Stadt) 

On 24 June 2024, the canton of Basel-Stadt was the second canton to publish its plans on how to invest the additional funds that are expected to be collected from the OECD minimum taxation (Pillar 2 / QDMTT). The media release (in German) can be found under this link.

Measures

The Basel package aims to ensure that the canton of Basel-Stadt remains an attractive investment location for existing and also for new companies. As from 2025, companies shall be able to apply for subsidies or internationally accepted tax credits based on clearly defined criteria. The location promotion measures focus on three areas, being innovations, society, and environment:

• Innovation funding: personnel expenses for innovative activities in the canton of Basel-Stadt (research, development, innovation) as well as location commitments such as the maintenance and the relocation of physical research, development and innovation facilities to the canton of Basel-Stadt and in/to Switzerland shall be supported.
• Social funding: parental leave granted by companies going beyond the legal minimum as well as novel research collaborations with universities that are of global benefits shall be supported.
• Environmental funding: concrete reduction of greenhouse gases in companies shall be supported and energy efficiency promoted.

The contributions made to support these areas (with the exception of the research cooperations) will be directed to the economy and will be funded by a new “Fonds Innovation-Society-Environment” which shall be funded with minimum CHF 150m and maximum CHF 300m per year. 

In order to fund the new “Fonds Innovation-Society-Environment, the following tax measures are intended:

• Implementation of a second tariff level of 8.5% on profit above CHF 50m for a limited period of 10 years for cantonal income tax purposes. 
• Reduction of the maximum relief based on the patent box for cantonal income tax purposes from 40% to 5% of the taxable income.

Climate policy 

On May 15, 2024, the Federal Council adopted its negative position on the popular initiative “For a social climate policy – financed fairly through taxation (Initiative for a Future)”, as the initiative was not a suitable means of achieving the climate goals. The message can be found under this link.

Taxation of legal entities

The SFTA has published an updated version of the article “Taxation of legal entities”. The article can be found under this link.

Requirements for digital accounting

The Lucerne tax administration has published a newsletter on requirements for digital accounting. The newsletter can be found under this link.

Minimum tax on real estate

The Lucerne tax administration has published a newsletter on minimum tax in connection with real estate for legal entities. The newsletter can be found under this link.

Current Case Law

Enclosed you will find a selection of the Swiss Federal Court (SFC), Swiss Federal Administrative Court (SFAC) and cantonal court decisions, that may be of interest to you: 

• SFC dated 19 December 2023: Taxation of pension income resulting from foreign voluntary pension schemes. Foreign pensions schemes need to be analyzed if they are comparable to Swiss pension schemes. In case they are not, income received from the respective occupational pension scheme is considered taxable income. This applies to both federal direct taxes and cantonal and communal taxes.
• SFC dated 29 January 2024: Limitation period for withholding tax evasion and treatment of administrative penalty decisions. In the case of WHT evasion, the limitation period must be accurately determined. If the company subject to WHT ceases to exist before the WHT was assessed, persons jointly liable for WHT can still be prosecuted under administrative criminal law.
• SFC dated 2 April 2024: Supreme Court allows preponderance of probability as standard of proof in lawsuit regarding place of effective management 
• SFAC dated 30 April 2024: No retroactive application of Notification Procedure for WHT already paid without reservation

PwC newsletter

We hope that this newsletter contains some topics of interest to you. If you have any questions, please do not hesitate to contact us. For ongoing updates from the world of tax, we also recommend our personalized newsletter, for which you can register using this link.

VAT

PwC wins landmark case enabling public bodies to reclaim additional input VAT

PwC has won a landmark case before the Federal Court for a community in the Canton of Zurich. This decision enables public bodies to reclaim input VAT on some investments in the past as well as in the future.

What should you do?
Any community, canton or city etc. which has previously incurred input VAT on investments which were used to generate taxable income (e.g., buildings rented out with VAT etc.) can now reclaim the input VAT from the FTA. If you have any questions or otherwise require support, please contact us. For more information, check out our blog. 

VAT returns must be filed online as of 1 January 2025

Starting from January 1, 2025, all VAT-liable companies must settle their VAT online via the ePortal. The VAT return form can no longer be ordered on paper. This must be done through the ePortal using either VAT declaration pro or VAT declaration easy. The ePortal allows for easier communication with tax authorities and faster processing of applications .

From 1 January 2025, the following requirements will be introduced: 

• Electronic VAT registration applications 
• E-filing of VAT returns 
• E-filing of VAT correction returns 

Taxpayers may apply for a 1-year transition period from paper to electronic filing or communications. 

Customs

Parliamentary Decisions on Customs Declaration Obligation and Self-Managed Customs Clearance

The Swiss National Council recently voted on two significant proposals concerning customs regulations: one to loosen the customs declaration obligation and another to promote self-managed customs clearance. These proposals have sparked considerable debate, and on 2 July 2024, the Council of States' commission voted decisively against both measures, with votes of 12:0 and 9:4, respectively.

The first proposal sought to exempt non-taxable goods from customs declaration requirements, aiming to reduce bureaucracy for importers and exporters by requiring declarations only for goods subject to customs duties. Despite this, customs declarations' data would still need to be submitted later due to national and international requirements, potentially shifting rather than reducing the effort. The lack of initial data could decrease the efficiency of customs controls and slow border processes due to increased manual controls. Further, Swiss customs had already planned a simplified declaration process for small shipments to mitigate bureaucracy.

The second proposal aimed to grant businesses greater control over their customs processes and costs. It would require customs brokers to obtain a power of attorney for each declaration and prohibit them from charging recipients for customs clearance unless explicitly chosen. While this proposal supports business autonomy, it risks disrupting the flow of goods, particularly for small e-commerce shipments.

Both proposals within the parliamentary discussion of the total revision of the Swiss Customs Law will undergo further debate in the Council of States, expected in autumn 2024. The decisive votes against these proposals by the second chamber's commission reflect significant political resistance. Businesses should closely monitor these developments, as they could impact customs processes and compliance requirements.

The entry into force of the new Customs Law is not expected before 2026, based on the current status.

Modernized Free Trade Agreement Signed with Chile

On June 24, 2024, the EFTA states—Switzerland, Iceland, Liechtenstein, and Norway—signed a protocol to modernize their Free Trade Agreement (FTA) with Chile. Initially established in 2004, this updated agreement addresses previous gaps and aligns with recent international trade agreements. It introduces new provisions on trade and sustainable development, financial services, SMEs, and e-commerce.

The updated FTA guarantees enhanced protection for Swiss geographical indications and provides comprehensive coverage and enforcement of intellectual property rights, improving the legal framework for economic operators. The agreement will take effect once internal approvals are completed within the EFTA states and Chile.

Nearly all Swiss exports to Chile (99.99%) will now be duty-free, reducing costs and boosting competitiveness for Swiss businesses. The inclusion of services trade, e-commerce, and intellectual property protections creates new business opportunities, while the enhanced focus on geographical indications and intellectual property rights increases the attractiveness for businesses operating in Chile. This modernization promises to foster a more favorable and competitive trade environment for Swiss businesses.

Switzerland enacts further sanctions against Russia

The Swiss Federal Department of Economic Affairs, Education and Research (EAER) has expanded its sanctions against Russia, adding 69 individuals and 86 entities to the list. This action aligns with the European Union's measures and targets individuals involved in various sectors such as business, propaganda, the armed forces, and the judiciary, as well as those responsible for deporting Ukrainian children and members of the Federal Security Service (FSB). Additionally, entities in the defense, financial, and trade sectors that are evading sanctions are also affected. This brings the total number of sanctioned individuals and entities to over 2,200, reflecting the EU's approach.

The EU’s sanctions package includes measures in the energy, financial, and goods sectors, which the Swiss Federal Council is currently reviewing for potential adoption.

Businesses must review and align their internal processes with these new sanctions, implementing additional control and reporting mechanisms to ensure compliance. Strengthening compliance frameworks is essential for businesses operating under Swiss legislation to adhere to these expanded sanctions.

Centralised Clearance for Import (CCI) goes live

On July 1, 2024, the European Union launched the first phase of the Centralised Clearance for Import (CCI) system, marking a major advancement in the digitalization of customs processes. This system allows businesses to submit a single customs declaration to one EU customs office, regardless of where the goods enter the EU. The supervising customs office then coordinates the process across member states.

The CCI system offers several advantages: it speeds up customs clearance by automating and centralizing declarations, reduces customs procedures by eliminating some steps, and simplifies administration by providing a single point of contact. This centralization also leads to cost savings and enhances transparency.

To benefit from the CCI system, businesses must be authorized economic operators for customs simplifications (AEO-C) and apply for CCI authorization through their local customs authorities. Currently, businesses in Bulgaria, Estonia, Spain, Luxembourg, Latvia, Lithuania, Poland, and Romania can use the system, with more member states expected to join over the next year. The first phase covers standard customs declarations, while the second phase, starting June 2, 2025, will include additional capabilities such as simplified declarations and handling of excise goods.

Updated EU Customs Valuation Guidelines Released

In April 2024, the European Commission released updated guidelines in the Customs Valuation Compendium, clarifying rules for the valuation of goods imported into the EU. The Compendium is a comprehensive guide aimed at helping EU Member States' customs authorities and businesses correctly value goods for customs purposes. It elucidates on the six valuation methods, covers various scenarios and provides case studies to illustrate the application of customs valuation rules under the Union Customs Code (UCC). Key updates include guidelines on valuing damaged or defective goods, buying commissions, prototype cars and development services.

The EU Customs Valuation Compendium is available on the European Commission’s website and is a crucial resource for accurately valuing goods in customs processes as the customs value is the basis for assessing customs debt.

EU's 14th Sanctions Package Targets Circumvention

On June 24, 2024, the European Council adopted its 14th package of economic and individual sanctions aimed at further weakening Putin's regime and those involved in the conflict in Ukraine. This package targets crucial sectors like energy, finance, and trade, and includes anti-circumvention measures that require EU parent companies to ensure their subsidiaries do not violate sanctions. The Council has added 61 entities to the list of those supporting Russia's military and industrial complex, imposing stricter export restrictions on dual-use goods and technologies that could bolster Russia's defense sector. Additionally, 116 individuals and entities threatening Ukraine's sovereignty face new restrictions.

Businesses under EU jurisdiction should review and adjust their internal processes to ensure compliance with these new measures, setting up enhanced control and reporting mechanisms as needed. Switzerland also adopted these sanctions in July, underscoring the need for heightened vigilance and compliance among businesses.

New criminal offenses and penalties for violating EU sanctions

In April 2024, the Council of the European Union adopted new legislation setting standardized rules for prosecuting violations of EU sanctions. This move follows the EU Commission’s December 2022 proposal aimed at preventing the circumvention of sanctions and enhancing enforcement, particularly in response to Russian aggression against Ukraine.

The new legislation mandates that EU Member States impose effective and proportionate criminal penalties for sanctions violations. Intentional breaches may result in prison sentences, alongside possible fines. Companies can also face penalties if an offense is committed by someone in a leadership position, including disqualification from business activities and revocation of necessary permits.

This directive will come into effect twenty days after its publication in the Official Journal of the EU, with Member States given twelve months to incorporate it into their national laws. Businesses should consider implementing robust export control measures, such as an Internal Control Program (ICP), to ensure compliance.

Environment – Social – Government («ESG») levies

In the EU, we are currently witnessing significant developments in the ESG (Environmental, Social, Governance) tax landscape. New levies are constantly being introduced, both small and large, which require our attention. These include among other plastic packaging taxes, sugar taxes, and the extended producer responsibility. All of these topics fall within the realm of ESG and are becoming increasingly important.

European Union: Packaging and Packaging Waste Regulation is close to adoption 

The European Parliament adopted a proposal on packaging and packaging waste, including packaging reduction targets (5% by 2030, 10% by 2035 and 15% by 2040) and require EU countries to reduce, in particular, the amount of plastic packaging waste.  

To reduce unnecessary packaging, a maximum empty space ratio of 50% is set for grouped, transport and e-commerce packaging; manufacturers and importers will also have to ensure that the weight and volume of packaging are minimized. 

Reduce packaging and restrict certain types: 

• Certain single use plastic packaging types will be banned from 1 January 2030: 
  • packaging for unprocessed fresh fruit and vegetables, 
  • packaging for foods and beverages filled and consumed in cafés and restaurants 
  • individual portions (for e.g. condiments, sauces, creamer, sugar) 
  • accommodation miniature packaging for toiletry products and very lightweight plastic carrier bags (below 15 microns). 

The new rule includes a ban on the use of so called “forever chemicals” (per- and polyfluorinated alkyl substances or PFASs) above certain thresholds in food contact packaging. 

• Encourage reuse and refill options for consumers:
  • Specific 2030 reuse targets are foreseen for alcoholic and non-alcoholic beverages packaging (except e.g. milk, wine, aromatised wine, spirits), transport and sales packaging, as well as grouped packaging. Member states may grant a five-year derogation from these requirements under certain conditions.
  • Final distributors of beverages and take-away food will have to offer consumers the option of bringing their own container. They will also be required to endeavour to offer 10% of products in a reusable packaging format by 2030. 

• Recyclable packaging, better waste collection and recycling:
  • Under the new rules, all packaging (except for lightweight wood, cork, textile, rubber, ceramic, porcelain and wax) will have to be recyclable by fulfilling strict criteria.
  • Measures also include minimum recycled content targets for plastic packaging and minimum recycling targets by weight of packaging waste.
  • By 2029, 90% of single use plastic and metal beverage containers (up to three litres) will have to be collected separately (via deposit-return systems or other solutions that ensure the collection target is met). 

Next step: once the EU Council formally approves the regulation, it enters into force as binding law in all EU Member States.

The rules will be mandatory for commercial and industrial packaging, for which only few EU countries have a system in place. Managing packaging data will be extremely important in the upcoming years.  

Germany: Introduction of levy on single use plastics postponed

The introduction of the plastic tax in Germany, which was planned to come into force 1 January 2025, has been temporarily halted. The legislation could not be completed on time. 

The Ministry of Finance is facing issues to present a workable model for the tax. Problems with data collection and the risk of excessive bureaucratic effort were central hurdles. Now, the search will continue for a functioning regulation so that the plastic tax can possibly be introduced from 2026 onwards. 

In summary, the levy will cover:

• Food containers;
• Packets and wrappers;
• Beverage containers and cups;
• Lightweight plastic carrier bags;
• Wet wipes;
• Balloons; and
• Tobacco products with filters and filters marketed for use in combination with tobacco products.

EU proposal VAT in the Digital Age (“ViDA”)

On 8 December 2022 the European (EU) Commission released its “VAT in the Digital Age (ViDA)” package, which is a set of proposals for new measures aiming to tackle the challenges of the digitization of the economy and to create a more resilient system against VAT fraud.   

The proposal deals with following main topics: 

1. Digital Reporting Requirements (“DRR”): to standardize the information required for electronic reporting and introducing mandatory e-invoicing for cross-border transactions. 
   • planned effective dates are 1 Jan 2024 and 1 Jan 2028
2. Platform economy VAT rules update: to address the challenges of equal treatment, clarifying the place of supply rules and enhancing the role of the platforms in the collection of VAT when they facilitate the supply of short-term accommodation rental or passenger transport services, but also for the supply of goods in almost all cases.
   • planned effective date 1 Jan 2025
3. Measures to avoiding multiple VAT registrations: by introducing Single VAT Registration as well as expanding the existing One-Stop Shops (OSS) and Import One-Stop Shop (IOSS) schemes (and other smaller changes).
   • planned effective date 1 Jan 2025

The ViDA initiative is an ambitious package that will result in significant changes and will have a major impact on systems and processes for a large number of businesses. However, the proposals are yet to go through the EU’s legislative process and will require the unanimous approval of all EU Member States as well as implementation in national legislations. Therefore, it remains to be seen whether the implementation of all proposed measures will be possible within the planned timeframe. 

Pharma VAT Recovery for Rebates granted under KVV Art. 71a: A Smart Business Move for You

Pharmaceutical companies selling drugs listed on the Speciality List (SL) in Switzerland have the opportunity to gain a valuable VAT benefit that could significantly enhance their financial standing. The reason for this opportunity is a recent shift in the approach of health and/or disability insurers regarding the rebates required under Swiss law (KVV Article 71a).

Previously, pharmaceutical companies had to grant rebates for Specialty List (SL) medicines under KVV Art. 71a if those drugs had been used in special cases, the price had to be below the price listed on the SL with no further stipulation in the law.  

Non-SL drugs (which typically are not reimbursed by the health insurance) are reimbursed in special cases under KVV Art 71b, the prices in those cases were subject to negotiation between the health insurance and the pharmaceutical company. Rebates in those cases were not obligatory, but often agreed upon in the negotiations.  

The partial revision of the KVV which went into force on 1 January 2024 now requires pharmaceutical companies to grant a set percentage of rebate on drugs reimbursed in special cases, regardless of whether those Drugs are listed in the SL or not, the same rebates apply for both SL and non-SL drugs.   

Until recently, these rebates were usually issued with VAT on the credit notes, but recently, many insurers have requested the credit notes to be issued without VAT, to avoid any VAT risk on their side.  

This change implies that pharmaceutical companies may have inadvertently VAT on these rebates in the past that can be claimed back. The good news is that such overpaid VAT amounts can be reclaimed from the Swiss VAT authorities, provided that a VAT ruling confirming this option is in place. We've been instrumental in assisting numerous pharmaceutical clients in securing these rulings, enabling them to recoup substantial VAT sums spanning the past five years.

A comprehensive exploration of the KVV Art 71a to c revision from a tax perspective can be found in our recent blog post.

Our Swiss Pharma Regulatory and Indirect Tax experts are looking forward to discussing VAT refund opportunities together with you.

E-Invoicing

France

A new decree has been published on plans for the delayed roll-out of French mandatory e-invoicing and B2C e-reporting. 

The roll-out plan is now as follows:

• 2025 - large-scale pilot;
• September 2026 - all businesses must be able to accept e-invoices. B2B e-invoicing and e-reporting for large and medium sized companies (more than 250 employees; and exceeding either of the following: €50 million turnover; or €43 million balance sheet) with an option to extend by a further 3 months to December 2026; and
• September 2027 - e-invoicing & e-reporting for small businesses below the above thresholds - also with an option to extend by a further 3 months to December 2027.

Germany

The German Bundesrat approves e-invoicing for B2B transactions within Germany, gradually commencing January 1, 2025 and with full implementation in 2028. In particular, on March 22, 2024, the German Bundesrat approved the law mandating B2B e-invoicing starting January 2027 for companies with turnover exceeding €800,000, and in January 2028 for those below this threshold. However, all companies must be capable of receiving structured electronic invoices as of January 1, 2025.

We recommend ensuring that businesses in Germany prepare to comply with mandatory B2B e-invoicing requirements by the designated deadline.

Learn how a solid regulatory strategy is essential for building investor trust and navigating the complex approval process. Our latest blog post delves into market authorization, particularly for biotech products and rare disease therapies. We highlight the importance of understanding the regulatory pathways in the US and EU, and how these can impact a startup's journey to market.

The post emphasizes the critical role of regulatory affairs in ensuring a product's success and the significance of maintaining transparent communication with investors. It outlines the importance of a well-defined regulatory strategy for business viability, operational efficiency, and market access, which in turn boosts investor confidence and valuation.

For investors, the blog offers insights into the importance of due diligence and the value of monitoring regulatory milestones. It also discusses how regulatory consultants can add value by assisting with risk identification and long-term strategy development.

Whether you're a startup seeking to bring innovative therapies to market or an investor looking to make informed decisions, understanding the synergy between regulatory compliance and investor trust is key. Get inspired to prioritize these elements for long-term profitability and growth.

Be sure to read the full post for a comprehensive guide on building investor confidence through strategic regulatory compliance in the biotech industry here.

Switzerland's healthcare system is evolving, and our latest blog post provides a strategic guide to understanding these changes which came into effect per 1 January 2024. The Federal Council has introduced amendments aimed at reducing healthcare costs and enhancing transparency and efficiency. 

Key updates include:

• Pricing changes: The shift from public to ex-factory pricing for medications, affecting how pharmaceutical companies set prices.
• Adjustment to Foreign Price comparison: Adjustments in foreign price comparisons, including new deductibles and reference price changes for several European countries.
• Therapy Cross-Comparison: Revised assessment rates for generics and biosimilars, with a focus on cost-effectiveness and market volume.
• Early Access to Medications: New provisions for early market authorization for high-need drugs.
• Transparency Boost: Mandatory publication of decisions regarding drug listings and pricing, fostering greater openness.

Read our blog post for an in-depth analysis of how these regulatory changes could impact the Swiss healthcare landscape here.

Schervin  Pouyan conducted an interview with Daniel Schwerdt, Head of Transfer Pricing at SoftwareONE, aiming to explore the current developments in transfer pricing from various perspectives, providing a comprehensive view of the challenges and thought-provoking insights for transfer pricing practices. Daniel Schwerdt discussed the dynamic environment of transfer pricing and tax, highlighting the challenges posed by new regulations such as OECD's Pillar Two, Pillar One Amount A and B, and the BEFIT Directive. He also touched upon the differences in transfer pricing practices between Switzerland and Germany, emphasizing the lack of detailed regulations in Switzerland compared to Germany.

Daniel Schwerdt also shared his views on the impact of the AI boom on the tax and transfer pricing functions, foreseeing that AI tools could accelerate and possibly improve the accuracy of various tasks within these function.

It was concluded that while the increasing tax regulations pose significant challenges for companies, there are opportunities for harmonization and simplification, such as Pillar Two and Pillar One Amount B. Additionally, the rapid adoption of Pillar Two's minimum tax in Switzerland indicates a shift in the country's approach to international regulations.

The interview was conducted for the “Transfer Pricing Perspecitves DACH – Ausgabe 62” and can be found under here (available in German only).

On 5 June 2024, Australian federal government has introduced legislation containing the proposed public country-by-country (CbC) reporting rules into Australian Parliament.

Updated draft bill, which were released in February, had the specified jurisdictions list included Switzerland. At this stage, no final determination has been released and there is no indication of whether changes to the draft list are proposed. The determination will be finalized and implemented after the legislation is in place. For a December reporting period, the year ending 31 December 2025 would be the first year subject to Australian public CBC reporting, with reporting due by 31 December 2026.

Multinational groups with Australian operations should assess whether they fall within the scope of the revised draft legislation and prepare for public CbC reporting requirements.

Please find the link to our updated PwC Tax Alert here.