- Updated
- October 2025
- Sections
- 15
- Questions
- 47
Key Facts
Core Framework
Article 58(1)(b or c) of the FDTL Article 24(1)(a or b) of the FTHL And case law (see notably): • 2C_1089/2018 of December 20, 2019, para. 11.2 • ATF 140 II 88, para. 4.2. • 2C_1082 and 1083/2013 of January 14, 2015, para. 5.1 • 2C_644/2013 of October 21, 2013, para. 3.1, or • 2C_834/2011 of July 6, 2012, para. 2.1
According to the case law of the Swiss Federal Supreme Court (see the specific Reference), Article 58 of the Federal Law on Federal Direct Tax of December 14, 1990 (FDTL) and Article 24 of the Federal Law on Harmonization of the Cantonal and Communal Taxes of December 14, 1990 (FTHL) create the necessary legal basis for application of the Arm’s Length Principle. Both articles deal with the taxable basis for corporations.
Switzerland relies on the OECD Transfer Pricing Guidelines (OECD TPG) as a source for the interpretation of the arm’s length principle.
In practice, Switzerland relies upon the OECD TPG and follows the guidance on comparability analysis as outlined in Chapter III.
In practice, statistical tools that take account of central tendency like the interquartile range or other percentiles are usually applied to narrow the range.
Documentation
Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinational Enterprise Groups (CbCR law; entry into force 1st December 2017) Ordinance on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR ordinance; entry into force 1st December 2017)
Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinational Enterprise Groups (CbCR law; entry into force 1st December 2017) Ordinance on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR ordinance; entry into force 1st December 2017)
Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinational Enterprise Groups (CbCR law; entry into force 1st December 2017) Ordinance on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR ordinance; entry into force 1st December 2017)
Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR law; entry into force 1st December 2017) Circular Letter of the Federal Tax Administration of 4 March 1997 (not available online)
The Country-by-Country Reporting (CbCR) law contains notification mechanisms that will apply to Ultimate Parent Entities and Surrogate Parent Entities in Switzerland. Furthermore, there are also penalties in relation to the filing and registration obligations of CbCR: (i) penalties for non-filing or late filing (ii) penalties for incorrect or inaccurate filing, and (iii) general penalties for non-compliance with the FTA’s orders. Switzerland may also conduct inspections to verify that the obligations of the Constituent Entities are fulfilled. Besides the obligation to file a Country-by-country report, Switzerland does not have specific transfer pricing legal documentation requirements, but if requested by the FTA or the cantonal tax authorities, taxpayers must demonstrate that the transfer prices applied rely on sound economic and commercial reasoning and comply with the arm’s length principle. Sanctions may apply if the taxpayer does not collaborate with the tax authorities.
TP Methods
- CUP
- Resale Price
- Cost Plus
- TNMM
- Profit Split
- Other
Selection: Most appropriate method
Dispute Resolution
Switzerland MAP profile Factsheet on the mutual agreement procedure
Switzerland does not have a formal APA programme in place, but it is authorised to enter bilateral or multilateral APAs on the basis of the MAP provision in the applicable tax treaty. It allows for roll-back of APAs if consistent with Switzerland’s domestic time limit of 10 years. Usually, Switzerland seeks to agree to APAs over a period of 5 years, but it can vary in practice. Moreover, Switzerland has a long-standing experience in the resolution of MAPs. The relevant details can be found in Switzerland’s MAP profile and the webpage of the State Secretariat for International Finance.
Switzerland MAP profile Factsheet on the mutual agreement procedure
Switzerland does not have a formal APA programme in place, but it is authorised to enter bilateral or multilateral APAs on the basis of the MAP provision in the applicable tax treaty. It allows for roll-back of APAs if consistent with Switzerland’s domestic time limit of 10 years. Usually, Switzerland seeks to agree to APAs over a period of 5 years, but it can vary in practice. Moreover, Switzerland has a long-standing experience in the resolution of MAPs. The relevant details can be found in Switzerland’s MAP profile and the webpage of the State Secretariat for International Finance.
Simplifications
Circular No. 6a of the Federal Tax Administration of 10 October 2004 on hidden capital Taux d'intérêt de l'impôt anticipé - updated regularly and published on the website of the Federal Tax Administration
The FTA has issued circulars containing safe harbours rules concerning thin capitalization and intra-group interest rate. The financial statements of a company can be changed, among other things to make year-end adjustments, until they are formally approved by the competent organ.
The application of the simplified and streamlined approach for baseline marketing and distribution activities is under consideration.
Special Topics
Swiss domestic legislation does not contain specific guidance on the pricing of controlled transactions involving intangibles and generally relies on the guidance in Chapter VI of the OECD TPG.
Swiss domestic legislation does not contain specific guidance on HTVI; however, Switzerland generally relies on the guidance contained in Chapter VI of the OECD TPG.
Transfer Pricing Q&A regarding Cost plus method
Swiss domestic legislation contains specific guidance on intra-group services transactions in the form of a Circular Letter which specifically instructs cantonal tax administrations to rely on the OECD TPG for the remuneration of intra-group service transactions. Additionally, the Federal Tax Administration (FTA) published on its website guidance in connection with the cost-plus method to provide clarity on its practice in line with OECD TPG.
Transfer Pricing Q&A regarding Intra-group loans
Swiss domestic legislation contains certain specific guidance on financial transactions in the form of Circular Letters published annually by the FTA on the interest rate recognized for tax purposes for advances or loans in Swiss francs or foreign currencies. Additionally, the FTA published a circular concerning hidden capital contribution in corporations and cooperatives. In general, Swiss domestic legislation relies on the guidance in Chapter X of the OECD TPG in relation to financial transactions. The FTA also published on its website guidance in connection with financial transactions to provide clarity on its practice.
Full OECD Questionnaire
Legal ReferenceArticle 58(1)(b or c) of the FDTL Article 24(1)(a or b) of the FTHL And case law (see notably): • 2C_1089/2018 of December 20, 2019, para. 11.2 • ATF 140 II 88, para. 4.2. • 2C_1082 and 1083/2013 of January 14, 2015, para. 5.1 • 2C_644/2013 of October 21, 2013, para. 3.1, or • 2C_834/2011 of July 6, 2012, para. 2.1
According to the case law of the Swiss Federal Supreme Court (see the specific Reference), Article 58 of the Federal Law on Federal Direct Tax of December 14, 1990 (FDTL) and Article 24 of the Federal Law on Harmonization of the Cantonal and Communal Taxes of December 14, 1990 (FTHL) create the necessary legal basis for application of the Arm’s Length Principle. Both articles deal with the taxable basis for corporations.
Switzerland relies on the OECD Transfer Pricing Guidelines (OECD TPG) as a source for the interpretation of the arm’s length principle.
Legal ReferenceCase law: ATF 119 IB 116, para. 2
The notion of related parties is not legally defined. However, the Swiss Federal Supreme Court has in its jurisprudence (see the specific reference) widely defined the notion of shareholder or any parties (private person or legal entity) with a commercial or a personal close relationship with the shareholder which is also relevant for transfer pricing purposes. Accordingly, an entity is considered related if, primarily, a commercial or, secondarily, a personal close relationship exists between the two entities. Therefore, direct or indirect participation in the management, control or capital is not required. The crucial question is if the tested transaction was conducted the way it was concluded only as a consequence of the associated relationship or not.
- CUP (provided)
- Resale Price (provided)
- Cost Plus (provided)
- TNMM (provided)
- Profit Split (provided)
- Other (provided)
Switzerland relies on the methods suggested in the OECD TPG although there is no direct reference to any method in its domestic legislation. For the selection of the most appropriate method, Switzerland will typically evaluate the nature of the controlled transactions through a functions, assets and risks (FAR) analysis.
- Hierarchy of methods (not selected)
- Most appropriate method (selected)
Swiss domestic legislation does not contain specific guidance on commodity transactions.
In practice, Switzerland relies upon the OECD TPG and follows the guidance on comparability analysis as outlined in Chapter III.
In practice, statistical tools that take account of central tendency like the interquartile range or other percentiles are usually applied to narrow the range.
Although comparability adjustments are not systematically required, they may be needed on a case-by-case basis if deemed appropriate.
Swiss domestic legislation does not contain specific guidance on the pricing of controlled transactions involving intangibles and generally relies on the guidance in Chapter VI of the OECD TPG.
Swiss domestic legislation does not contain specific guidance on HTVI; however, Switzerland generally relies on the guidance contained in Chapter VI of the OECD TPG.
The conditions for the application of the HTVI approach are those outlined in the OECD TPG.
The statute of limitations is 10 years after the assessment, which is in line with the statute of limitations generally applicable to other transactions.
None
Legal ReferenceTransfer Pricing Q&A regarding Cost plus method
Swiss domestic legislation contains specific guidance on intra-group services transactions in the form of a Circular Letter which specifically instructs cantonal tax administrations to rely on the OECD TPG for the remuneration of intra-group service transactions. Additionally, the Federal Tax Administration (FTA) published on its website guidance in connection with the cost-plus method to provide clarity on its practice in line with OECD TPG.
Legal ReferenceTransfer Pricing Q&A regarding Cost plus method
Swiss domestic legislation contains specific guidance on intra-group services transactions in the form of a Circular Letter which specifically instructs cantonal tax administrations to rely on the OECD TPG for the remuneration of intra-group service transactions. Additionally, the FTA published on its website guidance in connection with the cost-plus method to provide clarity on its practice in line with OECD TPG.
Legal ReferenceTransfer Pricing Q&A regarding Intra-group loans
Swiss domestic legislation contains certain specific guidance on financial transactions in the form of Circular Letters published annually by the FTA on the interest rate recognized for tax purposes for advances or loans in Swiss francs or foreign currencies. Additionally, the FTA published a circular concerning hidden capital contribution in corporations and cooperatives. In general, Swiss domestic legislation relies on the guidance in Chapter X of the OECD TPG in relation to financial transactions. The FTA also published on its website guidance in connection with financial transactions to provide clarity on its practice.
The FTA publishes annually circular letters on the interest rate recognized for tax purposes for advances or loans in Swiss francs or foreign currencies. Additionally, the FTA published a circular concerning hidden capital contribution in corporations and cooperatives. This administrative guidance represents a “safe harbour” rule. Taxpayers can deviate from the safe harbour rules by providing the tax authority a transfer pricing study.
Swiss domestic legislation does not contain specific guidance on cost contribution arrangements and generally relies on the guidance in Chapter VIII of the OECD TPG.
Legal ReferenceFederal Act on the International Automatic Exchange of Country-by-Country Reports of Multinational Enterprise Groups (CbCR law; entry into force 1st December 2017) Ordinance on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR ordinance; entry into force 1st December 2017)
- Master file consistent with Annex I to Chapter V of the TPG (not selected)
- Local file consistent with Annex II to Chapter V of the TPG (not selected)
- Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
- Specific transfer pricing returns (separate or annexed to the tax return) (not selected)
- Other (specify) (not selected)
Legal ReferenceArticle 124 FDTL Article 42 FTHL
Besides the obligation to file a Country-by-country report, there is no additional specific requirement concerning transfer pricing documentation. Swiss domestic legislation requires the taxpayer to provide all documents necessary for properly assessing the taxable income. In the case of related transactions, the taxpayer has to demonstrate that the transfer prices used are based on the arm’s length principle. Therefore, the preparation of transfer pricing documentation to document intra-group transactions is considered best practice and has become a standard requirement. In the case of MAPs and APAs, Master file, Local file and all relevant information for the resolution of the case are usually required.
Legal ReferenceFederal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR law; entry into force 1st December 2017) Circular Letter of the Federal Tax Administration of 4 March 1997 (not available online)
The Country-by-Country Reporting (CbCR) law contains notification mechanisms that will apply to Ultimate Parent Entities and Surrogate Parent Entities in Switzerland. Furthermore, there are also penalties in relation to the filing and registration obligations of CbCR: (i) penalties for non-filing or late filing (ii) penalties for incorrect or inaccurate filing, and (iii) general penalties for non-compliance with the FTA’s orders. Switzerland may also conduct inspections to verify that the obligations of the Constituent Entities are fulfilled. Besides the obligation to file a Country-by-country report, Switzerland does not have specific transfer pricing legal documentation requirements, but if requested by the FTA or the cantonal tax authorities, taxpayers must demonstrate that the transfer prices applied rely on sound economic and commercial reasoning and comply with the arm’s length principle. Sanctions may apply if the taxpayer does not collaborate with the tax authorities.
Legal ReferenceFederal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR law; entry into force 1st December 2017) Ordinance on the International Automatic Exchange of Country-by-Country Reports of Multinationals (CbCR ordinance; entry into force 1st December 2017)
The CbCR law provides for exemptions only consistent with Annex III to Chapter V of the TPG (e.g., for MNEs with total consolidated group revenue of 900 million Swiss Francs or less [see Article 6 CbCR law and Article 2 CbCR ordinance]).
Legal ReferenceSwitzerland MAP profile Factsheet on the mutual agreement procedure
Switzerland does not have a formal APA programme in place, but it is authorised to enter bilateral or multilateral APAs on the basis of the MAP provision in the applicable tax treaty. It allows for roll-back of APAs if consistent with Switzerland’s domestic time limit of 10 years. Usually, Switzerland seeks to agree to APAs over a period of 5 years, but it can vary in practice. Moreover, Switzerland has a long-standing experience in the resolution of MAPs. The relevant details can be found in Switzerland’s MAP profile and the webpage of the State Secretariat for International Finance.
- Rulings (selected)
- Enhanced engagement or cooperative compliance programmes (not selected)
- Advance Pricing Agreements (APA) (selected)
- Unilateral APAs (selected)
- Bilateral APAs (selected)
- Multilateral APAs (selected)
- International Compliance Assurance Programme (ICAP) (not selected)
- Mutual Agreement Procedures (selected)
The application of the simplified and streamlined approach for baseline marketing and distribution activities is under consideration.
The application of the simplified and streamlined approach for baseline marketing and distribution activities is under consideration.
- In-scope tested parties resident within the jurisdiction can elect to apply the simplified and streamlined approach (i.e. safe harbour) (not selected)
- In-scope tested parties resident within the jurisdiction are required to follow the simplified and streamlined approach for in-scope qualified transactions and tax administrations are allowed to impose the application of the simplified and streamlined approach to in-scope qualified transactions of tested parties resident within their jurisdiction (i.e. rule) (not selected)
- N/A (selected)
The application of the simplified and streamlined approach for baseline marketing and distribution activities is under consideration.
- 20% (not selected)
- 30% (not selected)
- Other (please specify) (not selected)
- N/A (selected)
The application of the simplified and streamlined approach for baseline marketing and distribution activities is under consideration.
Legal ReferenceCircular No. 6a of the Federal Tax Administration of 10 October 2004 on hidden capital Taux d'intérêt de l'impôt anticipé - updated regularly and published on the website of the Federal Tax Administration
The FTA has issued circulars containing safe harbours rules concerning thin capitalization and intra-group interest rate. The financial statements of a company can be changed, among other things to make year-end adjustments, until they are formally approved by the competent organ.
Downward corresponding adjustments in the absence of a mutual agreement procedure may be possible under Swiss domestic law in certain circumstances, on the initiative of the competent cantonal tax authority, and provided that the primary adjustment made by the foreign tax authority complies with the arm's length principle.
In Switzerland, a secondary adjustment represents the levying of withholding tax on the amount that qualifies as a hidden profit distribution in the context of transfer pricing. Secondary adjustments are carried out exclusively by the Swiss FTA, which has sole authority for levying such withholding tax, and may be done independently of a primary adjustment by the competent cantonal tax authority.
Switzerland has about 100 DTA, some of them concluded many years ago. The content of Article 7 in a given DTA represents the result of bilateral negotiation.
- Article 7 as it read before 2010. (selected)
- Article 7 as it reads after 2010. (selected)
- Other (please provide additional details) (not selected)
See answer to question 44.
Legal ReferenceStADG (German version) LECF (French version)
A fully revised version of the Federal Act on the Execution of International Double Tax Agreements entered into force on 1 January 2022.
Legal ReferenceTransfer Pricing page of the FTA Tax Information on Transfer Pricing
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