BEPS project on corporate taxation: Federal Council gives go-ahead for country-by-country reports

Bern, 20.01.2016 - Today, the Federal Council approved the signing of the multilateral agreement on the exchange of country-by-country reports. The agreement was developed within the scope of the OECD's BEPS project on corporate taxation. It describes the type of information exchanged between states on the activities of multinationals in their territory. Switzerland will determine at a later stage with which partner countries it wishes to make such exchanges.

Numerous states and territories, including Switzerland, will sign the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports in Paris on 27 January 2016.

The signing of the multilateral agreement is part of the base erosion and profit shifting (BEPS) project launched jointly by the G20 countries and the Organisation for Economic Co-operation and Development (OECD). The project's final outcomes were published on 5 October 2015. Some of these, such as the automatic exchange of country-by-country reports, are deemed to be new minimum standards, and all G20 and OECD member states have undertaken to comply with them.

The aim of country-by-country reports is to give an overview of multinationals' global allocation of income and taxes paid, together with other indicators on the location of economic activity within the group. Country-by-country reports will be exchanged automatically between the tax authorities of the countries where a group entity is present.

The multilateral agreement sets out the conditions under which the tax authorities of two countries will automatically exchange country-by-country reports on multinationals in their territory. It is based on the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters (administrative assistance convention), which was approved by the Federal Assembly in December 2015. The prerequisites for the exchange of information in domestic law are to be created in an implementing act.

The Federal Council will submit the multilateral agreement and the implementing act for consultation in the first half of 2016. They will go through the standard approval process (Federal Council dispatch to Parliament, approval by Parliament and optional referendum) before entering into force.

The signing of the multilateral agreement leaves it to Switzerland to choose the countries with which it wishes to automatically exchange country-by-country reports. Switzerland will determine the countries in question at a later date.

Address for enquiries

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