Answer ... Yes, anti-avoidance rules can be found both in case law and in the statutory provisions of the applicable laws. Some derive from the general interdiction of the abuse of law; others are based on explicit tax provisions.
Answer ... The main rule precludes taxpayers from adopting abusive behaviours. A behaviour is considered abusive if:
- a given structure or transaction is seen as unusual, inappropriate or strange;
- it must be presumed that the structure or transaction was chosen in order to avoid tax that would otherwise have been due; and
the structure or transaction would indeed lead to a considerable tax saving if it were accepted.
Answer ... The main rules are:
- the abuse of law theory;
- the concept of simulation (which is based on recourse to the underlying economic reality of a contractual arrangement);
- the old reserve theory (resulting in the denial of a favourable treaty withholding tax rate after an allegedly abusive restructuring);
- hidden profit distributions (where related parties are seen to be receiving an undue benefit from a company); and
Answer ... Yes, tax rulings are very common and regularly advisable.
Answer ... Switzerland has not enacted specific transfer pricing rules. However, the notion of dealing at arm’s length is generally observed and applied under Swiss tax laws. The Organisation for Economic Co-operation and Development guidelines are generally observed by the Swiss tax authorities.
Answer ... The statutory limitation periods are complex and vary according to the taxes involved. The most important rules are:
- the 10-year absolute statute of limitations for direct taxes (ie, the Federal Tax Administration can make amendments up to 10 years back if the respective legal requirements are met); and
- a five-year ‘relative’ statute of limitations regarding withholding tax on dividends. This is relative as the Federal Tax Administration may interrupt and thus extend it indefinitely.