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| Raoul Stocker |
Jonathan Belet |
On November 23 2016, the Federal Council adopted the Federal
Act on the International Automatic Exchange of
Country-by-Country Reports of Multinationals (the Act) that
aims to implement the country-by-country reporting (CbCR)
standard in Switzerland as recommended by the OECD as part of
the BEPS project. The Council of States passed the Act on March
16 2017 and the National Council will discuss the draft
legislation in June 2017. If the Parliament (i.e. the Council
of States and the National Council) approve the proposal and a
referendum is not held, the Act should enter into force at the
end of 2017.
The CbC report will be required in Switzerland for fiscal
years commencing on or after January 1 2018, but voluntary
filing will be possible for prior years provided the Act is
adopted and Switzerland has a system in place that makes it
possible to file the CbC report before the end of 2017.
Multinational enterprises (MNEs) with total annual
consolidated group revenues of less than CHF 900 million ($893
million) will not have to file a CbC report in Switzerland.
This is in line with the OECD's guidance, which provides that
the agreed threshold is €750 million or a near amount in
domestic currency as of January 2015. MNE groups that comply
with this local threshold requirement denominated in a local
currency should not be subject to file a CbC report in any
other jurisdiction that is using a threshold denominated in a
different currency.
While many countries have followed the implementation
guidance from the OECD and applied the January 2015 currency
exchange rate to determine the equivalent threshold in domestic
currency, several jurisdictions, such as Australia, convert the
local threshold on the basis of an average exchange rate for
the year for which the CbC report has to be filed.
This could give rise to inconsistent global CbC filing
requirements for Swiss headquartered MNEs because the Swiss
CbCR threshold was set on the basis of the exchange rate as of
January 1 2015 and considering that the Swiss franc soared in
mid-January 2015, following the decision by the Swiss National
Bank to drop the cap on the franc's value against the euro, and
has remained at high levels since then. For instance, a MNE
group headquartered in Switzerland with a consolidated turnover
of CHF 850 million will be exempt from filing according to the
Swiss legislation. However, if the group has an affiliate
located in Australia, it will nevertheless be required to file
a CbC report as its global turnover is above the Australian
threshold of A$1 billion ($737 million) converted in CHF (about
CHF 762 million according to the average AUD/CHF exchange rate
for 2016).
In light of the above, we recommend Swiss headquartered
taxpayers to give due consideration to monetary thresholds and
applicable currency exchange rates in the countries where they
operate in order to assess the requirement to file a CbC
report.
Raoul Stocker (rstocker@deloitte.ch)
and Jonathan Belet (jbelet@deloitte.ch)
Deloitte
Tel: +41 58 279 6271 and +41 58 279 8430
Website: www.deloitte.ch