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  • 1.

    Principal legislation
    Identify the principal transfer pricing legislation.

  • 2.

    Enforcement agency
    Which central government agency has primary responsibility for enforcing the transfer pricing rules?

  • 3.

    OECD guidelines
    What is the role of the OECD Transfer Pricing Guidelines?

  • 4.

    Covered transactions
    To what types of transactions do the transfer pricing rules apply?

  • 5.

    Arm’s-length principle
    Do the relevant transfer pricing rules adhere to the arm’s-length principle?

  • 6.

    Base erosion and profit shifting
    How has the OECD’s project on base erosion and profit shifting (BEPS) affected the applicable transfer pricing rules?

  • 7.

    Accepted methods
    What transfer pricing methods are acceptable? What are the pros and cons of each method?

  • 8.

    Are cost-sharing arrangements permitted? Describe the acceptable cost-sharing pricing methods.

  • 9.

    Best method
    What are the rules for selecting a transfer pricing method?

  • 10.

    Taxpayer-initiated adjustments
    Can a taxpayer make transfer pricing adjustments?

  • 11.

    Safe harbours
    Are special ‘safe harbour’ methods available for certain types of related-party transactions? What are these methods and what types of transactions do they apply to?

  • 12.

    Does the tax authority require taxpayers to submit transfer pricing documentation? Regardless of whether transfer pricing documentation is required, does preparing documentation confer any other benefits?

  • 13.

    Country-by-country reporting
    Has the tax authority proposed or adopted country-by-country reporting? What are the differences between the local country-by-country reporting rules and the consensus framework of Chapter 5 of the OECD Transfer Pricing Guidelines?

  • 14.

    Timing of documentation
    When must a taxpayer prepare and submit transfer pricing documentation?

  • 15.

    Failure to document
    What are the consequences for failing to submit documentation?

  • 16.

    Limitation period for authority review
    How long does the tax authority have to review an income tax return?

  • 17.

    Rules and standards
    What rules, standards or procedures govern the tax authorities’ review of companies’ compliance with transfer pricing rules? Does the tax authority or the taxpayer have the burden of proof?

  • 18.

    Disputing adjustments
    If the tax authority asserts a transfer pricing adjustment, what options does the taxpayer have to dispute the adjustment?

  • 19.

    Tax-treaty network
    Does the country have a comprehensive income tax treaty network? Do these treaties have effective mutual agreement procedures?

  • 20.

    Requesting relief
    How can a taxpayer request relief from double taxation under the mutual agreement procedure of a tax treaty? Are there published procedures?

  • 21.

    When relief is available
    When may a taxpayer request assistance from the competent authority?

  • 22.

    Limits on relief
    Are there limitations on the type of relief that the competent authority will seek, both generally and in specific cases?

  • 23.

    Success rate
    How effective is the competent authority in obtaining relief from double taxation?

  • 24.

    Does the country have an advance pricing agreement (APA) programme? If so, is the programme widely used? Are unilateral, bilateral and multilateral APAs available?

  • 25.

    Describe the process for obtaining an APA, including a brief description of the submission requirements and any applicable user fees.

  • 26.

    Time frame
    How long does it typically take to obtain a unilateral and a bilateral APA?

  • 27.

    How many years can an APA cover prospectively? Are rollbacks available?

  • 28.

    What types of related-party transactions or issues can be covered by APAs?

  • 29.

    Is the APA programme independent from the tax authority’s examination function? Is it independent from the competent authority staff that handle other double tax cases?

  • 30.

    Advantages and disadvantages
    What are the key advantages and disadvantages to obtaining an APA with the tax authority?

  • 31.

    Is the tax authority generally required to respect the form of related-party transactions as actually structured? In what circumstances can the tax authority disregard or recharacterise related-party transactions?

  • 32.

    Selecting comparables
    What are some of the important factors that the tax authority takes into account in selecting and evaluating comparables? In particular, does the tax authority require the use of country-specific comparable companies, or are comparables from several jurisdictions acceptable?

  • 33.

    Secret comparables
    What is the tax authority’s position and practice with respect to secret comparables? If secret comparables are ever used, what procedures are in place to allow a taxpayer to defend its own transfer pricing position against the tax authority’s position based on secret comparables?

  • 34.

    Secondary adjustments
    Are secondary transfer pricing adjustments required? What form do they take and what are their tax consequences? Are procedures available to obtain relief from the adverse tax consequences of certain secondary adjustments?

  • 35.

    Non-deductible intercompany payments
    Are any categories of intercompany payments non-deductible?

  • 36.

    What legislative and regulatory initiatives (besides transfer pricing rules) has the government taken to combat tax avoidance with respect to related-party transactions? What are the penalties or other consequences for non-compliance with these anti-avoidance provisions?

  • 37.

    Location savings
    How are location savings and other location-specific attributes treated under the applicable transfer pricing rules? How are they treated by the tax authority in practice?

  • 38.

    Branches and permanent establishments
    How are profits attributed to a branch or permanent establishment (PE)? Does the tax authority treat the branch or PE as a functionally separate enterprise and apply arm’s-length principles? If not, what other approach is applied?

  • 39.

    Exit charges
    Are any exit charges imposed on restructurings? How are they determined?

  • 40.

    Temporary exemptions and reductions
    Are temporary special tax exemptions or rate reductions provided through government bodies such as local industrial development boards?

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Bär & Karrer is a renowned Swiss law firm with more than 170 lawyers in Zurich, Geneva, Lugano and Zug. Our core business is advising our clients on innovative and complex transactions and representing them in litigation, arbitration and regulatory proceedings.

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