Switzerland is considering adopting OECD rules, known as Amount B, under the global tax deal to simplify transfer pricing methods for certain transactions. Switzerland might use Amount B as a safe harbor when dealing with countries implementing it.
Amount B aims to simplify how corporations value intercompany marketing and distribution of tangible goods. The U.S. is pushing for these rules to be mandatory, though not all countries agree. In June, the OECD finalized a list of jurisdictions that will benefit from more certain transfer pricing outcomes.
To access the list of the jurisdictions, click here.
Switzerland is considering adopting OECD rules, known as Amount B, to simplify transfer pricing for certain transactions under the global tax deal. During the American Bar Association Event that took place on September 2024, it was mentioned that Switzerland may use Amount B as a safe harbor for dealings with countries using these rules.
Amount B aims to simplify how companies value intercompany marketing and distribution of tangible goods. While the US supports making these rules mandatory, not all countries agree. The OECD finalized a list of “covered” countries in June 2024, offering more certainty in transfer pricing under this framework.
Swiss Federal Council announced that Switzerland will implement the income inclusion rule (IIR) of the global minimum tax in 2025. This will allow the government to tax the profits of foreign subsidiaries of Swiss companies, expecting to generate income between CHF 500 million to CHF 1 billion annually.
However, it will not adopt the undertaxed profits rule (UTPR), due to concerns that the risks outweigh potential revenue. The IIR is seen as a way to secure tax receipts and enhance Switzerland’s business appeal; on the other side the UTPR, which targets multinationals paying less than a 15% corporate tax rate, is subject to legal criticism, hence Switzerland will continue monitoring international developments on the global tax agreement.