Switzerland: Switzerland is likely to remain a premier group financing location post-BEPS

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Switzerland: Switzerland is likely to remain a premier group financing location post-BEPS

Zulauf-Rene
Fross-Andreas

Rene Zulauf

Andreas Fross

Globalisation has played an important role in the way multinational enterprises (MNEs) are structured today. Group financing is centralised at a regional or global level to benefit from numerous cost synergies, including taxes.

In many cases, MNEs have established cross-border financing structures and used financial instruments to benefit from hybrid mismatches and other tax arbitrage opportunities.

Nowadays, efficient tax planning for group financing becomes more challenging in light of the OECD BEPS project and because of non-harmonised specific anti-avoidance regulations (SAARs) imposed by high-tax jurisdictions to safeguard their tax base.

The abolition of hybrid structures under BEPS will basically have no impact on Swiss financing structures as such hybrid structures never worked in Switzerland. For instance, it is not possible to obtain the Swiss participation exemption on a payment that is classified as tax deductible interest in the paying country.

As part of the so-called Swiss Corporate Tax Reform III (CTR III) the Swiss Finance Branch regime, with an effective tax rate (ETR) of 1%-2%, will sunset in 2019 or 2020. The Swiss legislator is discussing the introduction of a notional interest deduction (NID) concept for all Swiss companies as part of CTR III, which could result in an ETR of as low as 2%-3% for financing companies in certain cases.

The introduction of NID, combined with the non-tax advantages of Switzerland as a financing location, such as a first class financial services industry and infrastructure, political stability and stable currency, would ensure that Switzerland remains as one of the premier financing locations of choice in the age of BEPS, in particular for MNEs which already have a strong operational presence and/or significant substance in Switzerland or plan to establish such presence and substance.

Rene Zulauf (rzulauf@deloitte.ch) and Andreas Fross (afross@deloitte.ch)

Deloitte

Tel: +41 58 279 6360 and +41 58 279 7632

Website: www.deloitte.ch

more across site & shared bottom lb ros

More from across our site

Heads of tax need to push their teams forward as strategic business advisers to add value across the organisation, says Sandy Markwick
Scott Bessent reportedly felt undermined by Musk naming Gary Shapley as acting IRS commissioner; in other news, Baker Tilly will combine with a top 15 US firm
The promise of nine years’ tax certainty and a ‘rational and pragmatic’ government process makes APAs a no-brainer, Indian tax advisers tell ITR
Despite garnering significant revenues from multinationals, Italy’s digital services tax presents pressing double taxation issues, say Stefano Simontacchi and Francesco Saverio Scandone of BonelliErede
ITR’s research shows that in-house tax counsel in Asia also feel underserved by their advisers’ international networks
World Tax global head of research Jon Moore tells ITR how his team spots standout submissions, and gives early statistical insights into this year’s entries
Australia’s conservative opposition will repeal controversial tax agent reporting rules if elected in the country’s May general election
Shapley would be the fourth person to hold the job this year; in other news, UK tax advisory firm MHA raised fewer funds than expected from its London IPO
The US needs to be involved in pillar one for there to be more international acceptance of the project, Michael Masciangelo says
The UK regulator is investigating EY’s auditing of the national postal service as it relates to the high-profile Horizon scandal, which saw hundreds wrongfully convicted
Gift this article