PwC Deal Talk – Doing Deals in Canada

Edition: 1/2017

DealTalk_E1Canada is an important trade partner for Switzerland. In 2015, Swiss exports to Canada amounted to USD 3.4 bn and mainly consisted of pharmaceutical products, organic chemicals, scientific and precision instruments, machinery and equipment, clocks, watches and parts. Moreover, with a total invested capital of USD 8.9 bn at the end of 2015, Switzerland is also among the ten biggest foreign investors in Canada.

The current weak Canadian Dollar offers attractive investment opportunities for Swiss investors. While the Canadian market has some similarities to the US and European market, there are some unique features that investors need to be aware of. With first-hand experience and local teams on the ground, PwC can help you to avoid common pitfalls when doing deals in Canada.

Read the PwC Deal Talk


Please do not hesitate to contact us.

Sascha Beer
Corporate Finance / M&A
+41 58 792 15 39

Michael Huber
Senior Manager
Corporate Finance / M&A
+41 58 792 15 42

Invitation Webcast: US Tax Reform and Impact on Companies Investing in the US

Wednesday, January 18, 1:00 pm.- 2:00 pm ET

Online registration

Whatever your resolutions, the start of a new year offers opportunities for new beginnings and improvements. As you look at 2017 and what’s ahead for your business, PwC’s Doing business in the United States can help guide you through the US tax system as you invest or expand your investments in the United States.

Wondering what’s the outlook for the US tax system this year? Join PwC for a closer look at tax reform and other tax policy issues specific to global companies investing in the United States.

Wednesday, January 18, 1:00 pm.- 2:00 pm ET


  • How is the US tax system unique?
  • What is the process of transforming tax reform into US law?
  • What are the option for tax reform and how do they compare and contrast (Camp plan, Trump proposal, Republican Blueprint)
  • What are the consequences for US inbound companies, from interest
    educibility, treatment of intangibles, state taxes, and border adjustability?


  • Chris Kong, US Inbound Tax Leader
  • Peter Merrill, US National Economics and Statistics Principal
  • Pam Olson, US Deputy Tax Leader & Washington National Tax Services Leader
  • Oren Penn, US Inbound Tax and International Tax Services, Principal

For further details please refer to our registration page.

US Swiss Webcast – Doing business in the United States

Doing business in the United States has always presented unique opportunities and challenges for Swiss companies. The investment, financing and tax environment is an important field and several US tax developments will impact Swiss companies doing business in the US.

Get access to the recording of this webcast through the link below.  Join an insightful discussion on the current US issues facing you and your peers — tax directors, CFOs and investors of Swiss companies doing business and investing in the US via US operation and subsidiaries.

Title: US Swiss Webcast – Doing business in the United States
Date:  6 July 2016
Time:  11:00 Eastern/ 17:00 CET – 60 minutes

Online recording

These and other questions will be addressed during our webcast, which we cordially invite you view:

  • US competitiveness in a global economy
    What do foreign investor,CFOs, tax directors of US inbound companies have to say?
  • Section 385 proposed regulations
    On April 4, 2016, the Internal Revenue Service and US Treasury Department proposed regulations under Section 385 targeting related party funding transactions. Their implication is so broad, that many routine corporate treasury activities could have profound impact on how US inbound companies deploy and manage cash. The proposed rules do not only impact US groups but also US inbound companies. Do you know how you could be impacted?
  • US double tax treaty update
    What protection does the double tax treaty give Swiss companies investing in the US? In the light of the international developments on OECD and EU level, what changes are to be expected considering the new draft of the US model tax treaty?
  • US federal and state audit issues
    Treaties may not protect you against US state taxes; what other trends do you need to know about?
  • US tax reform: To be or not to be?
    With the presidential campaign ongoing, how realistic is a US tax reform considering the candidates and political environment. Many voices call for a US tax reform but what are the chances for success? How would a US tax reform impact foreign companies operating in the US?

We look forward to welcoming you online.

To access the webcast (via PC or Mobile device) – click on the following link to open the recording of the webcast:

Online recording

Complete the required registration fields and select “Submit”. The webcast will open to enable you to view the recording of the presentation.

Audio for this webcast will be heard through your computer speakers.  If you have problems hearing audio, please get in touch with Marcus Lier.

Speakers of this webcast

Céline C. Jundt
Swiss Tax Desk New York
+1 646 471 61 38

Oren Penn, Principal
Washington National Tax

Brazilian interest on net equity rules remain unchanged

Brazil_IIOn 30 September 2015, the Executive Branch of the Brazilian government released a Provisional Measure 694/2015 (PM 694), which was supposed to add a new deductibility limitation for interest on net equity (INE) for Brazilian income tax and social contribution tax purposes, and which additionally sought to increase the income tax withholding rate on INE payments to non-resident shareholders.

However, due to lack of action by the Brazilian Congress to convert the provisions of PM 694 into law (in its existing form or with amendments), the PM expired as of 9 March 2016. The expiration was confirmed by a notice released by the Brazilian Senate on the same date.

Hence, as for now, the Brazilian INE rules remain unchanged. However, as it is possible that the proposed amendments will be reintroduced in a future PM, multinational companies that own Brazilian entities should continue to monitor developments related to INE payments.


Read more about the PM 694 in our newsletter.


If you´re interested in this topic or have any questions connected with it, please feel free to contact our experts:

Daniel Gremaud
Partner, Leader Tax & Legal Romandie
+41 58 792 81 23

Matthias Marbach
Director, Tax & Legal Services
+41 58 792 44 76

January 2016 FATCA Developments

Extension of Aggregated US Account Reporting Deadline for Swiss FIs

On 20 January the Swiss State Secretariat for International Financial Matters (SIF) published an update (German, French) regarding the aggregated report that is due on 31 January for US account holders that have not provided consent to be reported.

Similar to last year, the update from the SIF notes that the SIF has spoken with the US and agreed that Swiss FIs will not be considered to be significantly noncompliant under Article 11 Section 2 of the Swiss IGA if they are unable to report the required aggregated information by 31 January of this year. Instead, Swiss FIs will have until 31 March 2016 to submit the required aggregated information. This deadline extension for filling the aggregated reporting is a one time exception and does not apply to future years.  Furthermore, this exception only applies to the non-consenting US accounts and does not apply to the non-consenting NPFFI accounts (i.e., if applicable, the aggregate information regarding accounts held by non-consenting NPFFIs is still due by 31 January).

A Swiss FI that wishes to make use of the extended deadline is required to inform the FTA. The Swiss Banking Association recommends that such a notification is made to the FTA on or before 31 January 2016.

Deferral of Deadline for Pre-existing Account Due Diligence Certification

Section 8.03(A) of the FFI agreement and regulation §1.1471-4(c)(7) require Reporting Swiss FIs to certify to the IRS that they have complied with the due diligence procedures for preexisting accounts within the applicable timeframe for complying with such procedures.  According to the regulation, this certification must be made no later than 60 days following the date that is two years after the effective date of the FFI agreement (e.g., Aug 29, 2016 for FFI agreements effective on July 1, 2014).

On 19 January 2016, the IRS announced (via Notice 2016-08) that this certification will be deferred and will be submitted at the same time that the Reporting Swiss FI is required to submit its first periodic certification of compliance (i.e., by July 1, 2018).

The change to the timing of the certification does not affect the deadlines for a Reporting Swiss FI to complete the due diligence procedures for preexisting accounts.  As part of the certification to be made in 2018, Reporting Swiss FIs will be required to certify to the completion of those procedures within the time prescribed in the Swiss IGA.

For additional information regarding this deferral as well as information regarding reporting on NPFFI accounts and the ability of a Swiss FI to rely on an electronically provided Forms W-8 or Form W-9, please see Notice 2016-08.

New Draft Form W-8BEN-E

On 12 January 2016, the IRS published a new draft version of Form W-8BEN-E and corresponding draft instructions.  Some of the revisions include:

  • A new checkbox for payees to check regarding accounts they hold that are not financial accounts;
  • More information regarding how Nonreporting IGA FFIs should use Form W-8BEN-E; and
  • A new requirement for a taxpayer to specify which Limitations on Benefits test it meets under its applicable treaty in order to claim a reduced rate of withholding

We will continue to keep you updated on further developments as they occur.

Argentina modifies certain exchange control rules and export duties

The recently elected government of Argentina has issued the following measures related to the Argentine exchange control regime and export duties:

Exchange control regime modifications

Importations of goods and services

On December 17, 2015, the Argentine Central Bank has issued Communication ‘A’ 5850, which introduced significant modifications to the Exchange Currency Market related to payment for the import of goods and services. Payments for the import of goods on shipments dated on or after December 17 can be executed without any restrictions.

Certain public and public guaranteed debt for the import of goods dated on or before December 16, 2015, can be also paid through the Argentine exchange currency market without limitations.

For outstanding debt, a schedule has been outlined limiting the debts (from USD 2 million to USD 4 million) that each importer may pay per calendar month. Commencing June 1, 2016, there will be no limit on the amount of debt to be paid.

Payments for the import of services provided on or after December 17 can be also executed without any restrictions. Likewise, other schedule limiting the monthly payments of the outstanding debt from import of services has been outlined until June 2016.

Purchase of foreign currency by Argentine residents

Resident individuals and corporations (with certain exceptions) and local governments may access to the Exchange Currency Market to purchase foreign currency without the previously required approval of the Central Bank, for amounts not exceeding USD 2 million in the calender month. The currency must be used for certain listed payments as loans granted to non-residents or direct investments abroad by Argentine residents.

Financial debts with non-resident entities

Communication ‘A’ 5850 also provides that all financial debts incurred abroad by the financial sector, the non-financial private sector, and local governments no longer must settle the related funds through the Exchange Currency Market.

If a resident entity seeks repayment of principal or interest through the exchange currency market (i.e., the Argentinian resident needs to acquire the foreign currency via this market to repay the debt), then the funds lent by the non-resident entity must comply with the Exchange Currency Market settlement requirements.

For new debts (or renewals) incurred on or after December 17, 2015, the minimum period to retain the funds in Argentina is reduced from 365 to 120 calendar days.

The requirement to initiate a non-interest-bearing deposit amounting to 30% of the borrowed funds has been repealed.

Export duties relief

Decree 133/2015 provides a 0% tax rate for the export of most agricultural and industrial products, effective on or after December 17, 2015. Certain exceptions may apply.

For further information, please contact your PwC advisor or the contacts listed below:

Daniel Gremaud
Partner, Leader Tax & Legal Romandie
+41 58 792 8123

Matthias Marbach
Director, Mergers & Acquisitions Tax
+41 58 792 4476

New TIEA signed between Switzerland and Brazil – meanwhile Dutch holding companies back on “gray list” of privileged tax regimes

TIEA_BildOn 23 November 2015, Switzerland and Brazil have signed a new tax information exchange agreement (TIEA). The new TIEA does not only foster the bilateral relationships between the two countries and ensures compliance with OECD international fiscal transparency standards, but also underlines Switzerland’s removal of the Brazilian blacklist in June 2014 permanently. Before entering into force, the TIEA however needs to be ratified by the countries’ parliaments and is subject to an optional referendum in Switzerland.

While the newly signed TIEA provides more legal and economic certainty, it may also be a first step in direction of a deeper collaboration in tax matters, particularly building a corner stone for a future double taxation treaty.

For further information regarding the aforementioned topic read our latest publication here.

Merger & Acquisitions in Latin America – How to create value and avoid tax pitfalls!

LATAMLatin America is an increasingly important market for Swiss enterprises as it opens access to a growing number of new customers.

However, Latin America is not a homogeneous market: it is split into two major free trade zones, namely the Alianza del Pacifico (a liberal economy with continuous growth) and the MERCOSUR (protectionist states with Brazil as the largest and Argentina as the second-largest economy, both of which are faced with severe economic difficulties). Moreover, the local rules and regulations are challenging, to say the least!

Doing deals in Latin America therefore requires a different approach than the “Swiss way” in order to address the tax issues as well as – and perhaps more importantly – the cultural differences (i.e. not only the cultural clash with LATAM sellers, but also the problems you could run into with the LATAM advisors you engage). Not surprisingly, you might also have to deal with an array of seller-specific issues…

…and of course a lot of key aspects do require high post-deal maintenance planning in order not to jeopardise the acquired assets – or have you ever been in the fortunate position to repatriate cash from Argentina?

What does this mean for you?

The Mergers & Acquisitions in Latin America Event on 8 December 2015 in Zurich, will be conducted by our LATAM experts here in Switzerland. It will provide you with guidance on how to approach deals in Latin America that create value and avoid pitfalls. This event will also offer a platform for exchanging experiences and discussing the obstacles you, yourself, may be facing.

Take this opportunity to meet our Latin America experts and read more here.

Impact of the Double Tax Treaty between Switzerland and Argentina


With the conclusion of the ratification procedure, the Double Tax Treaty (DTT) between Switzerland and Argentina for the avoidance of double taxation with respect to taxes on income and on capital, completed in Bern on 20 March 2014, will enter into force on 27 November 2015. The convention will replace the provisional convention of 1997 that has been terminated by Argentina on 16 January 2012, and therefore ends the contract-free period. The rules under the treaty will be applicable starting from 01 January 2016, with the exception of source taxation for which relief can be claimed retroactive for 2015.[1]

Brief summary of the new convention

The convention primarily provides legal certainty and aims to avoid double taxation with respect to taxes on income and capital between Switzerland and Argentina. The new rules are comparable to the original convention from 1997, with a slight deterioration in favor of Argentina. The essential aspects of the treaty in particular with respect to the source taxation of dividends, interest and royalties are outlined below.


The provisions referring to dividend payments is in accordance with the one from the double tax convention of 1997. Article 10 paragraph 2 of the new treaty provides a limitation of the withholding tax to 10 per cent if the beneficial owner is a corporation (other than a partnership) which holds directly at least 25 per cent of the capital. In all other cases, the withholding tax is 15 per cent of the gross amount of the dividend payment, if the payment does not exceed the cumulated taxable profits of the company paying the dividends.[2] In the latter case, figure 9 letter b of the protocol provides a definitive tax of 35 per cent (so-called “Equalization Tax“) for which no relief is provided under the new convention.


Article 11 paragraph 2 of the convention provides a limitation of the withholding tax to 12 per cent of the gross amount of the interest paid (exceptions apply under paragraph 3). Switzerland generally does not levy a withholding tax on interests paid on commercial loans. Under Argentinean law however, interest payments to a foreign resident are subject to withholding tax of 15.05 to 35 per cent, depending on their nature.[3]


Under Argentinean law, royalties paid to a foreign resident are subject to a withholding tax of on different rates, depending on their nature. According to Article 12 paragraph 2, the convention provides a limitation of the withholding tax to 3 to 15 per cent, in particular:[4]

  • (a) 3 per cent of the gross amount paid for the use of, or the right to use, news;
  • (b) 5 per cent of the gross amount paid for the use of, or the right to use, copyright of literary, dramatic, musical or other artistic work (but not including royalties in respect of motion picture films and works on film or videotape or other means of reproduction for use in connection with television);
  • (c) 10 per cent of the gross amount paid for the use of, or the right to use, industrial, commercial or scientific equipment or any patent, trade mark, design or model, plan, secret formula or process, computer software or for information concerning industrial or scientific experience including payments for the rendering of technical assistance; and
  • (d) 15 per cent of the gross amount of the royalties in all other cases.

As Switzerland does not levy any withholding tax on royalties, the provisions under paragraph 2 apply to royalty payments from Argentina to a Swiss resident only.

Capital gains

Article 13 paragraph 5 (considering the exception provided in paragraph 4) provides a limitation of the withholding tax on capital gains derived from the alienation of shares to 10 per cent if the beneficial owner directly holds at least 25 per cent of the capital and to 15 percent in all other cases (same as for dividend taxation).[5]

Further amendments

A major change compared to the previous convention of 1997, is the inclusion of article 25 with respect to the information exchange. In line with the current international standard on information exchange, the new treaty facilitates the exchange of information upon request.

Impact on Swiss corporations

Even though the new DTT does not vary significantly from the previous version of 1997, it primarily provides legal certainty for Swiss corporations with investments in Argentina. While the previous version has never been ratified and has been terminated in 2012, the newly signed treaty introduces a new legal base. From a pure cash tax perspective, the DTT does not provide better WHT rates on dividends as set forth by Argentine internal law.

However, the limitation to 10% taxation in the DTT with Switzerland concerning capital gains (M&A transaction relevant cash tax outflows which are usually burdensome as transferred from sellers to buyers or requiring the acquisition of complex intermediary structures), could open planning opportunities as Argentine internal law stipulates a taxation at 13.5% on gross sales proceed or 15% on actual capital gain.

For more information on the topic discussed above, including what it means in practice or for other tax questions, contact your local PwC engagement team or me.

[1] Staatssekretariat für internationale Finanzfragen (29.10.2015), Grünes Licht für das Inkrafttreten des DBA zwischen der Schweiz und Argentinien (
[2] Abkommen zwischen der Schweizerischen Eidgenossenschaft und der Republik Argentinien zur Vermeidung der Doppelbesteuerung auf dem Gebiet der Steuern vom Einkommen und vom Vermögen (DBA-AR), S. 26 (
[3] PwC, Worldwide Tax Summaries – Corporate Taxes 2015/16, S. 58-59, Botschaft zu einem neuen Doppelbesteuerungsabkommen zwischen der Schweiz und Argentinien, S. 8601 (
[4] DBA-AR, S. 29;, S. 11-12.
[5] DBA-AR, S. 30-31.
Daniel Gremaud
Leader Tax & Legal Services Romandie (Western Switzerland)
Avenue C.-F. -Ramuz 45
1001 Lausanne
Tel. +41 58 792 81 23
Matthias Marbach
Director Tax & Legal Services
Birchstrasse 160
8050 Zürich
Tel. +41 58 792 44 76

Safe Harbor: stormy seas in Europe − impending storm in Switzerland?

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: