Rulings, country-by-country reports and the minimum tax

The spontaneous exchange of rulings

Corporate taxpayers were drawn into the exchange of information through the OECD project on base erosion and profit shifting (BEPS). Action 5 of the project required states to exchange information spontaneously on tax rulings that could give rise to base erosion, such as rulings on preferential regimes, on transfer pricing or on the attribution of profits to permanent establishments.¹ Switzerland implemented the requirement through the Convention on Mutual Administrative Assistance in Tax Matters, which entered into force for it on 1 January 2017, and through Art. 22a ff. TAAA and Art. 5 ff. of the Tax Administrative Assistance Ordinance.² Spontaneous transmissions began on 1 January 2018. They covered rulings issued from 1 January 2010 that were still applicable at that time, for which the cantonal authorities had twelve months to submit the information.

Art. 8 of the Ordinance defines a ruling as a communication by a tax authority that gives information, confirmation or assurance on the tax consequences of a situation presented by the taxpayer, and Art. 9 lists the categories subject to exchange. The cantonal tax authority must forward the relevant data to the Federal Tax Administration within sixty days of issuing the ruling. The taxpayer is informed and has ten days to object. Transmission follows after consent or after a final decision, and only to states party to the Convention.³ In the first months of 2018 Switzerland transmitted 82 reports to 41 states, among them Germany, France, the United Kingdom, the Netherlands and Russia.⁴

For Ticino the exchange of rulings had a direct effect on the trading and holding companies that had obtained cantonal rulings under the special tax regimes abolished by the Federal Act on Tax Reform and AHV Financing (TRAF) of 2019, which Chapter F.II describes. Rulings on the status of auxiliary companies, on principal structures and on finance branches were sent to the states of the parent companies and of the counterparties. Through this channel the Italian tax administration can obtain information on Ticino rulings granted to subsidiaries of Italian groups and compare it with the transfer pricing documentation of the Italian parent.⁵

Country-by-country reports

BEPS Action 13 introduced the country-by-country report (CbCR) for multinational groups with consolidated revenue of at least EUR 750 million. The ultimate parent entity files a report that shows, for each jurisdiction, revenues, profits, taxes paid, capital, employees and tangible assets. Switzerland implemented the obligation by the Federal Act on the International Automatic Exchange of Country-by-Country Reports of 16 June 2017, applicable for fiscal years from 2018, with voluntary filing for 2016 and 2017.⁶ Few Ticino groups reach the threshold, but the Swiss subsidiaries of large Italian groups, such as the luxury goods distributors of the Mendrisiotto described in Chapter F.III, appear in the reports that their Italian parents file in Italy. The Italian authorities thus see the profits booked in Ticino without any request to Switzerland.

Notes

1. OECD, Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 – 2015 Final Report (Paris, 5 October 2015), with the framework for the compulsory spontaneous exchange of information on rulings that could give rise to BEPS concerns, https://www.oecd.org/tax/countering-harmful-tax-practices-more-effectively-taking-into-account-transparency-and-substance-action-5-2015-final-report-9789264241190-en.htm. ↩
2. Federal Tax Administration, "Spontaner Informationsaustausch (SIA)", https://www.estv.admin.ch/de/spontaner-informationsaustausch-sia (legal basis in the Convention, in force for Switzerland on 1 January 2017, Art. 22a ff. of the Tax Administrative Assistance Act and Art. 5 ff. of the Tax Administrative Assistance Ordinance; transmission from 1 January 2018; rulings from 1 January 2010). ↩
3. ESTV, "Spontaner Informationsaustausch" (above), on Art. 22a ff. TAAA, Art. 5 ff. TAAO, the sixty-day period, the ten-day period for consent or objection and the exchange only with states party to the Convention, since 1 January 2018. Tax Administrative Assistance Ordinance of 23 November 2016 (TAAO), SR 651.11, Art. 8 (definition of the ruling) and Art. 9 (duty of spontaneous exchange), https://www.droit-bilingue.ch/de-fr/6/65/651.11-8-11.html and https://www.droit-bilingue.ch/de-fr/6/65/651.11-9-12.html. ↩
4. "Spontaner Informationsaustausch: 82 Meldungen an 41 Staaten", Moneycab, 8 May 2018, https://www.moneycab.com/?p=1010973. ↩
5. On the function of the exchange see OECD, Action 5 Final Report (above), and ESTV, "Spontaner Informationsaustausch" (above). The use of exchanged rulings by the Agenzia delle Entrate in individual audits is not documented in public sources, so the sentence describes what the channel permits. ↩
6. Federal Act on the International Automatic Exchange of Country-by-Country Reports of Multinationals of 16 June 2017 (CbCR Act), SR 654.1, Art. 30 (transmission of reports filed voluntarily for earlier tax periods) and Art. 31 (obligation from the reporting periods beginning on or after the first day of the calendar year following entry into force), https://www.droit-bilingue.ch/de-fr/6/65/654.1-30-34.html and https://www.droit-bilingue.ch/de-fr/6/65/654.1-31-35.html; Ordinance of 29 September 2017, SR 654.11, https://www.droit-bilingue.ch/de-fr/6/65/654.11-index.html. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.