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Switzerland: Impact of EU transparency directive on country-by-country reporting for Swiss businesses



David McNeil

Sarah Drye

In April 2013, the Irish presidency of the EU secured agreement on a new accounting directive to increase the transparency of payments made to governments by European companies involved in extractive and forestry industries. The proposals will amend the Transparency Directive (2004/109/EC) to require country-by-country reporting on payments made to governments including, among others, taxes on profit, licence fees and royalties.

While EU directives are not directly applicable to Switzerland, they are often taken into account by Swiss lawmakers when considering changes to Swiss law. Existing transparency initiatives – including the Dodd-Frank Act and the voluntary Extractive Industries Transparency Initiative (EITI) – have attracted interest in the Swiss Federal Parliament and debate has already begun on the introduction of equivalent laws in Switzerland, most recently in the form of a parliamentary motion proposed on June 11.

Of particular interest for Swiss businesses is the scope of the Swiss initiative, which could impact companies trading extracted natural resources as well as those involved in the primary extraction itself.

Regardless of the final scope of any Swiss legal obligation in this area, it is likely that the pressure to improve transparency around tax will be felt by a much wider population of businesses as politicians, non-government organisations and increasingly the wider media, turn the spotlight on the contribution of multinationals to the economies of the countries in which they operate.

Compliance with transparency initiatives will have wide implications for processes and systems, particularly for those multinational groups who decentralise responsibility for tax, as is common for Swiss-based organisations.

For certain businesses, the requirement to report more information on taxes is likely to become an obligation. For others, additional voluntary disclosure could be a strategic choice in demonstrating commitment to conducting their tax affairs in a socially responsible manner.

David McNeil (

Tel: +41 (0)58 279 8193
Sarah Drye (

Tel: +41 (0) 58 279 8091


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