Federal Council adopts dispatch on exchange of country-by-country reports

Bern, 23.11.2016 - During its meeting on 23 November 2016, the Federal Council adopted the dispatch on the multilateral agreement on the exchange of country-by-country reports and the federal act required for its implementation. The objective of the proposal is to improve transparency with regard to the taxation of multinationals and to establish a uniform framework for the exchange of the reports.

Switzerland is thereby implementing the minimum standard of the G20 countries and the OECD to combat base erosion and profit shifting (BEPS). In order to implement the automatic exchange of country-by-country reports in Switzerland, the following legal bases must exist:

the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters which was adopted by Parliament on 18 December 2015. It will enter into force on 1 January 2017 and will be applicable for Switzerland from 1 January 2018;
the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports signed by Switzerland on 27 January 2016 which the Federal Council is submitting to Parliament with this proposal for approval;
the Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals which the Federal Council is also submitting to Parliament with this proposal.

If Parliament approves the proposal and a referendum is not held, the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports and the Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals could enter into force at the end of 2017. Multinationals in Switzerland would thereby be obliged for the first time to draw up a country-by-country report for the 2018 tax year. The exchange of country-by-country reports between Switzerland and its partner states could therefore take place in 2020. At the same time as the Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals comes into force, the Federal Council will determine with which countries Switzerland wishes to exchange data.

So long as the legal bases enter into force at the end of 2017, groups can submit a country-by-country report if they so wish for tax periods before 2018. The Act provides that the Federal Tax Administration (FTA) can transmit these reports on the basis of the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports to partner states from 2018.

A consultation was carried out from 13 April to 13 July 2016 on the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports and the Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals. The introduction of the exchange of country-by-country reports was positively received by the majority.

Country-by-country reports

Country-by-country reports provide information on how the turnover generated and the taxes paid by a multinational group of companies are distributed globally. Furthermore, they contain information on the most important economic activities of the multinational in the individual countries. These reports have to be drawn up by multinationals with an annual consolidated turnover of more than EUR 750 million or the equivalent in the national currency as of 1 January 2015. Approximately 200 groups resident in Switzerland are likely to be concerned.

Country-by-country reports will be transmitted automatically on an annual basis to the tax authorities of the countries where these groups have business units so long as a bilateral foundation for the exchange exists. The data is directed exclusively at tax authorities and will not be published.

Address for enquiries

Anne Césard, Deputy Head of Communications, State Secretariat for International Financial Matters SIF tel. Tel. +41 58 462 62 91, anne.cesard@sif.admin.ch