On 16 March 2018, the Internal Revenue Service (“IRS”) published the FATCA Responsible Officer certification texts on its website (in draft form). Additionally, the IRS extended the deadline for the FATCA Responsible Officer certification. Please refer to the following link for access to the draft FATCA certification texts as well as the notice regarding the deadline extension.
The IRS also announced that the IRS’s FATCA Certification Portal (“IRS Portal”) will not be available until July 2018 (at the earliest). Based on the newly provided information, we understand that the IRS will grant FATCA Responsible Officers an extension of at least three months (as per the activation date of the IRS Portal) for the FATCA Certification. This means that the FATCA Certification deadline will be extended from 1 July 2018 to 1 October 2018 (assuming the IRS Portal is activated on 1 July 2018).
Furthermore, the IRS published different draft certifications texts for the various Financial Institution categories (e.g., Reporting Model II FFI, Local FFI, etc.). An initial review of the draft certification texts indicates no unexpected surprises in terms of the content or scope of the FATCA Certification.
As we continue to analyze the certification texts, we will actively post any new and relevant information. In the meantime, please feel free to contact us in case of any questions.
Partner, Operational Tax
+41 58 792 43 72
+41 58 792 4249
On 9 March 2018, the Organisation for Economic Co-operation and Development (“OECD”) issued new model disclosure rules that require the mandatory disclosure of OECD Common Reporting Standard (“CRS”) avoidance schemes. The model will require lawyers, accountants, financial advisors, banks and other service providers to inform tax authorities of any schemes they put in place for their clients to avoid reporting under the CRS. Additionally, under the model, reporting of structures that hide beneficial owners of offshore assets, companies and trusts is required. The OECD also hopes to deter the design, marketing and use of these arrangements and schemes and bolster the overall integrity of the CRS.
The document issued by the OECD provides background information regarding the CRS anti-avoidance topic, includes text of the model itself, as well as a commentary to explain the model. As a next step, the model disclosure rules will be submitted to the G7 presidency in an effort to adopt a wider strategy of monitoring and acting upon market tendencies to avoid CRS reporting and hide assets offshore. Within the scope of the CRS anti-avoidance work, the OECD is also addressing cases of abuse of golden visas and other schemes used to circumvent CRS reporting.
Please refer to the link for access to the OECD’s new model disclosure rules.
Additionally, please refer to the link for access to the OECD’s accompanying FAQs.
Partner, Operational Tax
+41 58 792 43 72
On 19 February 2018, the Organisation for Economic Co-operation and Development (“OECD”) released a consultation document on the misuse of residence by investment schemes to circumvent the OECD Common Reporting Standard (“CRS”). As an increasing number of jurisdictions are offering so-called “residence by investment” (“RBI”) or “citizenship by investment” (“CBI”) schemes, the OECD is seeking public input to obtain further evidence on the misuse of such RBI/CBI schemes.
The OECD’s consultation document aims to:
- assess how RBI/CBI schemes are used to circumvent the CRS;
- identify the types of schemes that present a high risk of abuse;
- remind stakeholders of the importance of correctly applying relevant CRS due diligence procedures to aid in avoiding such abuse; and,
- explain the next steps the OECD plans to undertake to further address this issue.
The OECD will take public input into account in order to determine how to best proceed with the RBI/CBI schemes issue. Parties interested in providing input have until 19 March 2018 to email their comments to the OECD. All comments must be sent to CRS.Consultation@oecd.org and addressed to the International Co-operation and Tax Administration Division.
Please refer to the following link for access to the OECD’s consultation document.
During December 2017, the Swiss Federal Tax Administration (“Swiss FTA”) and the Swiss State Secretariat for International Financial Matters (“SIF”) provided important updates regarding the Automatic Exchange of Information on financial accounts (“AEOI”) under the OECD’s Common Reporting Standard (“CRS”). Upon the completion of ongoing parliamentary work, the SIF updated the list of jurisdictions and territories with which Switzerland has agreed to exchange information under the CRS. In addition to containing Switzerland’s AEOI partner jurisdictions, the list also includes additional information, such as the date of entry into force of the various CRS agreements as well as specific distinctions between the different partner jurisdictions. The updated list distinguishes between states that:
- have not yet submitted their partner state notifications. The AEOI will thus be activated at a later date;
- have declared themselves to be “permanent non-reciprocal jurisdictions”, i.e. they will supply account information to the partner states on a permanent basis but will not receive such data;
- do not meet the requirements of the global AEOI standard at present and have postponed the introduction of the AEOI.
Please refer to the following links for the updated list of Switzerland’s AEOI partner jurisdictions in German / English.
In addition to the above-mentioned updates, the “Questions and Answers to CRS” on the Swiss FTA website and the OECD “FAQs” were also updated in December 2017.
Partner, Operational Tax
+41 58 792 43 72
Has a health authority prohibited the sale of your pharmaceutical products in Europe, because you are a Swiss established company?
Sale of pharmaceutical products within the EU by non established companies – background
- Recent developments show that health authorities increase audits and prevent the sale of pharmaceutical products within the EU by companies located outside of the EU, if they do not have a correct wholesaler license in place.
- Legal basis: The pharmaceutical legislation, Art. 76 of the directive 2001/83EG, the anti-counterfeiting directive 2011/62 and correspondent legal acts implemented in 2015 in different EU member states
- Consequences/major challenges:
- Restructuring the current Swiss business model
- Significant changes in the supply chain
- Direct and indirect tax implications in Switzerland and in the European Union
- ERP system and contract adaptions
Pharma & Life Science Hot Topics: Sale of pharmaceutical products within the EU by non established companies
Is your pharmaceutical company established in Switzerland?, Do you sell pharmaceutical (end-) products/drugs in the EU?, Is the wholesaler license used issued on the name of another company than that one that sells the products in the EU?
If the answer of all three key questions is yes, we recommend to have your business reviewed and optimized. We have developed a pragmatic solution that works in practice from a regulatory, direct and indirect tax as well as legal perspective –in line with local Swiss and European regulations.
Call for action / Your benefits
We would be pleased to discuss further with you and offer a solution that is perfectly customized to your requirements and needs, in order to ensure a smooth, cost efficient and compliant sale of pharmaceutical products in the EU.
Download here the publication in PDF version: Pharma & Life Science Tax Hot topics
+41 58 792 44 69
As you may have noticed, some changes will become applicable to the Harmonised System (HS) and subsequently to the Swiss Nomenclature (customs tariff) as well as to the EU Combined Nomenclature (CN) as of 1 January 2017. This includes the classification of pharmaceutical products of chapter 30:
EU Combined Nomenclature (CN)
Although the import of these products in Switzerland and the EU is still duty free, we recommend to check the classification of your products and makes changes/ amendments where needed. Should you need our assistance with (re)classifying your products, we are of course happy to help you.
Download here the publication in PDF version: Customs and International Trade 2016
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Christina Haas Bruni
Senior Manager, TLS
+41 58 792 51 24
When it comes to levels of transparency in the field of public procurement, Switzerland is proud about its positioning in international rankings. This has its reasons inter alia in the well-established processes foreseen by law in most of the relevant areas. But also this field of the law needs to keep up with constant developments and innovations in the economic world, including the increasingly broad areas in which public and private activities converge for the sake of optimizing the business environment. Precisely this is what the various legislative levels in Switzerland are envisaging for the future, and substantial changes in this field are ahead of us.
One of the developments will certainly affect the procurement processes to be observed by hospitals, both stately held and private hospitals and health institutions. Philipp do Canto, our expert lawyer in Public Law, describes in this essay a recent court case in the Canton of Zurich that reflects the developments in the field of public procurement in the health industry and deals in particular with the blurred line that distinguishes the obligations of transparency in their respective procurement practices. This is an interesting essay that might be able to give you a flavor about how things are today and into which direction they might evolve in the future.
If this is a matter of your interest, do reach out to Philipp do Canto. He will be glad to elaborate on this topic and share with you his expertise and founded predictions.
Read more here.
On 6 October this year the European Court of Justice declared that the European Commission’s ‘Safe Harbor’ decision (2000/520) of 2000 − which found that the United States afforded an adequate level of protection of personal data − was invalid.
Safe Harbor Framework
This Safe Harbor Framework was one of a number of legal bases allowing the transmission of personal data from the EU to the United States to the 5,500 or so US entities self-certified under the Safe Harbor scheme. With this legal basis no longer valid, data transfer now has to be put on another basis, as stipulated in Article 26 of EU Directive 95/46/EC.
Declaration of invalidity
One of the reasons for the European Court of Justice’s declaration of invalidity is that personal data are not afforded adequate protection because the Safe Harbor Framework does not sufficiently limit the US government’s ability to infringe on the fundamental rights of individuals for reasons of national security and the public interest, and that it even gives these aims precedence over the safe harbor principles. There are thus not adequate safeguards in place to ensure that personal data will only be accessed if this – in terms of the European interpretation – is necessary and proportionate. As evidence of disproportionate use of personal data by government authorities it points to the PRISM programme exposed by Edward Snowden.
Implications for Switzerland
This European Court of Justice decision does not have any direct consequences for Switzerland for the time being. Switzerland and the United States have their own Safe Harbor arrangement – albeit virtually identical to the US/EU agreement – that currently affords an adequate level of data protection for around 3,900 self-certified US entities. However, it seems likely that the turmoil in Europe will also spill over into Swiss data protection, and that the Swiss Federal Data Protection and Information Commissioner (FDPIC) will also conclude that the Swiss Safe Harbor Framework no longer meets the requirements of Swiss data privacy law. In its initial opinion, the FDPIC indeed expressed the view that the European Court of Justice’s decision also calls the agreement between Switzerland and the United States into question, and that as far as Switzerland is concerned, in the event of renegotiation only an internationally coordinated approach that includes the EU would be appropriate.
On 22 October the FDPIC found that the Safe Harbor Framework between Switzerland and the United States no longer constitutes an adequate legal basis for data transfer to the United States. Swiss companies that transfer data to the United States on the basis of the Safe Harbor Framework must contractually agree guarantees assuring adequate levels of data protection with the US entity by the end of January 2016. While this will not solve the problem of disproportionate interference by the authorities, it will enable the level of data protection to be improved somewhat. In addition, persons affected must be given clear and comprehensive information, especially regarding the possibility that the data could be accessed by the authorities
If you’d like to talk about Safe Harbor, contact our experts: