Most corporate reorganisations (e.g. mergers, de-mergers, transfer of business assets within a group of companies, vertical and horizontal spin-off of business or part of business, share-for-share transactions and cross-border reorganisations where the Swiss tax residence is maintained, and like-kind exchange of participations) are typically possible without triggering adverse Swiss tax consequences (tax neutrality). In addition, special rules provide for a legal framework to tax neutrally substitute assets and qualifying shareholdings. For reorganisations, it is best practice to apply for advance tax rulings with the competent tax authorities. Advance tax rulings covering certain cross-border reorganisation aspects may be subject to the spontaneous exchange of information (see Spontaneous exchange of information below).
Foreign Account Tax Compliance Act (FATCA)
In 2013, Switzerland and the United States (US) signed a bilateral FATCA agreement. The FATCA agreement will help Swiss financial institutions by means of simplifications in the implementation of the US FATCA legislation. The FATCA agreement and the implementing Swiss act entered into force on 2 June 2014 and 30 June 2014, respectively.
The FATCA agreement shall ensure that accounts held by US persons with Swiss financial institutions are disclosed to the US tax authorities either with the consent of the account holder or through ordinary administrative assistance channels (no automatic information exchange).
Automatic information exchange
In view of the OECD’s developments on a new standard for the automatic exchange of information, Switzerland will switch to an automatic exchange of information between the competent authorities on a reciprocal basis.
Switzerland has agreed on the automatic exchange of information in respective agreements with numerous partner states (e.g. the EU member states, many offshore countries, as well as most of the OECD member states).
The first automatic exchange of information between Switzerland and its partner states occurred in 2018.
Spontaneous exchange of information
On 1 January 2017, the revised ordinance on international administrative assistance in tax matters (StAhiV) entered into force. It contains new Swiss rules on the spontaneous exchange of information. A spontaneous exchange of information is an unrequested exchange of information available to the competent Swiss tax authorities that may be of interest to the competent foreign tax authority. The first spontaneous exchange of information between Switzerland and its partner states occurred in 2018.
The spontaneous exchange of information covers the following advance tax rulings:
- Advance tax rulings relating to preferential tax regimes.
- Unilateral advance pricing agreements (APA) or other transfer pricing rulings.
- Downward adjustment rulings.
- PE rulings.
- Conduit rulings.
The relevant information regarding such advance tax rulings shall be spontaneously exchanged with the competent foreign tax authorities within three months after the receipt of the information by the Swiss Federal Tax Administration.