Switzerland: Switzerland’s proposed Corporate Tax Reform III – transfer pricing impacts

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’s proposed Corporate Tax Reform III – transfer pricing impacts

habermacher.jpg

klein.jpg

Hans Rudolf Habermacher


Anja Klein

The proposed abolishment of the Swiss holding, mixed and domiciliary company tax regimes within the next five to seven years and the planned introduction of replacement tax measures (for example, the licence box and notional interest deduction) known as the "Swiss Corporate Tax Reform III" has recently sparked some discussions regarding its impact on corporate taxation. It should not be forgotten, though, that this reform will also have significant impacts on transfer pricing arrangements: many MNEs conducting business in Switzerland operate under said tax regimes and from a transfer pricing perspective their abolishment may entail a revision of the underlying business model and transfer pricing set-up to ensure MNEs continue to benefit from favourable taxation levels in Switzerland. The proposed tax reform may require taxpayers to pay more attention to their transfer pricing arrangements. This, however, may provide valid opportunities for companies to optimise their intercompany structures in such a way that they make maximum use of the new structuring possibilities. If implemented, an IP box tax exemption may allow existing companies to significantly reduce the tax rate on royalty income received from foreign affiliated companies or alternatively, a separate licence box company could be created to benefit from such an exemption.

Similarly, the notional interest deduction on equity as currently suggested would be an effective way to reduce a holding company's or mixed company's taxable income in case of a strong equity base. Thus, the new tax reform will allow taxpayers to implement attractive structures through valid transfer pricing, if aligned to the transfer pricing guidelines, as alternatives to the existing preferential Swiss tax regimes.

Hans Rudolf Habermacher (hhabermacher@deloitte.ch)

Tel: +41 58 279 6327
Anja Klein (aklein@deloitte.ch)

Tel: +41 58 279 7245

Deloitte

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