Evolving Swiss Rules on Cost-Based Transfer Pricing Methods

Although Switzerland does not have specific transfer pricing (“TP”) legislation, cost-based methods have a long tradition in the country dating back to the post-world war period. However, the practice of the Swiss Tax Administrations has been regularly adapted, in parallel with the harmonization of Swiss tax law with international regulations.

Historical Origin

For many years, Switzerland had special tax regimes in place for companies whose main activities were abroad, under which profits earned abroad were not taxed. To ensure a minimum taxable profit margin for the activities in Switzerland, the country published a circular with safe harbor rules as early ...