Issue December 2011 / January 2012Transfer Pricing |
We are proud to present you the third edition of Transfer Pricing Insights – Deloitte Switzerland’s bi-monthly newsletter focusing on Transfer Pricing issues affecting MNCs in Switzerland. It covers Swiss ‘hot’ topics and economic related news as well as the latest Deloitte global edition of the Arm’s Length Standard.
Swiss Transfer Pricing Hot Topics
Effects of the new Russian Transfer Pricing Law
At the beginning of 2012 the revised Russian Transfer Pricing Law will come into effect. Although Russia has known transfer pricing documentation requirements since 1999, the new regulations contain a number of changes which may be of relevance for your company. E.g. you may also have to document transfer prices with entities where your shareholding exceeds 25 %. The law now further provides detailed guidelines on how to select the appropriate transfer pricing method.
The most significant change may be the elimination of the old safe harbour rule on distribution margins. This has the effect that transfer prices between a Russian production entity and a Swiss trading entity will in future have to meet the arm’s length standard based on the business model defined between the entities. We recommend companies being affected by the change to pro-actively review their intra-group business model / price setting. Please see more details here.
Possibility for APA’s with further countries
Switzerland has a long lasting tradition in concluding bilateral advanced pricing agreements (APA). The list of countries where such APA’s may be concluded has been expanded recently with Italy, China, Poland and Russia. Given the fact that these markets are of significant economic importance for most Swiss Multinationals or Swiss based headquarter companies, considering an APA’s may help to mitigate possible uncertainties regarding the transfer prices applied. The Swiss Transfer Pricing team will focus on the APA topic in our Transfer Pricing breakfast series in spring (Zurich: 22nd February, Geneva: 7th March).
Transfer pricing adjustments due to poor implementation of TP policies
A recent survey by Deloitte in the U.K. has indicated that poor implementation and monitoring of TP policies accounted for half the 2011 transfer pricing adjustments made by the UK tax authorities. Based on our experience the results in other countries may show similar findings. This reiterates the fact that transfer prices need to be monitored from a central group perspective in order to avoid unnecessary tax adjustments.
The Arm’s Length Standard
The recent issue of Deloitte’s global Transfer Pricing newsletter concentrates particularly on:
- The OECD working party six has announced that as part of their work on the intangible section a revised “Ownership” paper shall be released for comments in January 2012
- The Australian ATO has recently published a ruling on business restructuring (TR 2011/1)
- Angola is expected to enact transfer pricing rules in 2012
These and further topics can be accessed by downloading your copy of the Arm’s Lengths Standard here.
We hope you have enjoyed the edition of Transfer Pricing Switzerland Insights. If you would like to discuss your situation and receive a professional opinion on any Transfer Pricing related topics, please feel free to contact us directly via phone or email.
