The board: duty calls

The international tax landscape in flux: what a member of the board needs to know

This brochure is designed to help you as you steer your organisation through a complex tax landscape.

With growing calls for transparency and tax justice vying with the demands of intense tax competition, the Swiss economy and the players within it face major challenges. In this brochure we review the most important tax developments in Switzerland and internationally and summarise those we consider to be very relevant for a member of the board.

We wish you stimulating reading!

Access the brochure here

EUDTG Newsletter May – June 2016

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various opportunities.

The following topics are covered in this issue of EU Tax News:

CJEU Cases

  • Greece: CJEU Judgment on inheritance tax exemption for
    primary residence: Commission v Greece
  • Sweden: CJEU Judgment on withholding tax levied on nonresident
    pension funds: Pensioenfonds Metaal en
  • United Kingdom: CJEU referral on the compatibility of an exit charge on
    trust migration with EU Law

National Developments

  • Netherlands: Court of Appeal judgment on the compatibility of the
    Dutch fiscal unity regime with Israel-Netherlands DTT
    non-discrimination provision
  • Switzerland: Switzerland adopts the final corporate tax reform III
  • United Kingdom: UK votes to leave the EU
  • United Kingdom: Ignatius Fessal v The commissioners for HMRC [2016]
    UKFTT 0285 (TC)

EU Developments

  • EU: ECOFIN political agreement on the Anti-Tax Avoidance
  • EU: ECOFIN Council 25 May 2016 conclusions on an
    external taxation strategy and measures against tax
    treaty abuse
  • EU: European Parliament Press Release on corporate
  • EU: ECOFIN adopts the 4th Directive on Administrative
    Cooperation (DAC4)

Fiscal State aid

  • EU: DG Competition Working Paper on State aid and tax
  • EU: European Commission Notice on the notion of State aid
  • Luxembourg: European Commission non-confidential State aid
    opening Decision in McDonald’s
  • Luxembourg: European Commission non-confidential final State aid
    Decision on the Fiat case
  • Netherlands: European Commission non-confidential final State aid
    Decision on the Starbucks case

This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Read the full newsletter here.

Further information about our service offerings in EU taxes:

European Commission’s non-confidential version of the final State aid decision on Starbucks

On 27 June 2016, the European Commission (“EC”) published the non-confidential version of its decision of 21 October 2015 on the formal State aid investigation into the Advance Pricing Agreement (APA) of Starbucks Manufacturing EMEA BV (SMBV). In its final decision, the EC concluded that the APA obtained by SMBV from the Dutch tax authorities in relation to its transfer pricing (TP) methodology constitutes State Aid and ordered immediate recovery of the amount of tax by which the tax liability of the company for the period concerned considered underestimated. The Netherlands has appealed this EC final decision before the General Court of the European Union.

The decision is available online under the case number SA.38374.

For more details please refer to the press release of the EU Commission and the respective PwC EUDTG Newsalert dated 29 June 2016.

Read our previous publications
EU State Aid Update: McDonalds, Fiat, EC Working Paper
EU Commission Notice on notion of State aid
Belgium appeals the EU Commiccion’s State aid Decision on the excess profit ruling system
European Commission finds the Belgian excess profit ruling system as unlawful fiscal state aid, some EUR 700 million to be recovered

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

Armin Marti
Partner, Leader Corporate Tax Switzerland
+41 58 792 43 43

Anna-Maria Widrig Giallouraki
Senior Manager, International Tax
+41 58 792 42 87

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

EU Anti-Tax Avoidance Directive: ECOFIN political agreement reached

On 21 June 2016 the Council of the Ministers of the European Union (ECOFIN) reached political agreement on the proposed Council Directive laying down rules against tax avoidance practices that directly affect the functioning of the internal market, also known as anti-tax avoidance directive “ATAD” (hereinafter “the directive”). The directive is one of the key seven (7) elements of the so-called “Anti-tax avoidance package” of measures proposed by the European Commission (EC) in January 2016. The package mainly builds on OECD recommendations concerning base erosion and profits shifting (BEPS), issued in October 2015 but also sets out rules for exit taxation and a general anti-abuse rule.

The directive provides rules on interest limitation, a general anti-abusive rule (“GAAR”), Controlled Foreign Company “CFC” taxation rules, exit taxation- and hybrid mismatch rules. Of particular importance for multinationals with Swiss/-EU operations are primarily the interest limitation and the CFC rules. Especially in connection with the CFC rules, a unified approach towards third (non-EU) countries is anticipated, i.e. the countries may prepare black/grey/white lists of third countries based on common criteria.

Multinationals with Swiss/-EU operations should identify and review their EU-related group internal loan arrangements as well as the holding of participations in the group through direct or indirect EU parents. Important to note in this respect is that there may be differences in the transposition of the directive into the national laws of the 28 Member States, therefore specialised advice should be sought to safeguard that no adverse tax implications may arise for your group.

As a next step, the directive will be submitted to a forthcoming Council meeting for adoption. From a timing perspective of its rules coming into effect: with the exception of the exit tax rules which would apply as of January 1, 2020 and some grandfathering possibility on the interest deduction rule, the directive would apply as of January 1, 2019.

For more details please find below our EU Direct Tax Newsalert.


Should you have any further questions please contact your local PwC advisor our the contacts listed below:

Armin Marti
Leader Corporate Tax Schweiz
Tel. +41 58 792 43 43

Anna-Maria Widrig Giallouraki
Senior Manager
Tel. + 41 58 792 42 87

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

EUDTG Newsletter January – February 2016

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various opportunities.


The following topics are covered in this issue of EU Tax News:


CJEU Cases

  • Belgium: CJEU referral regarding Belgian legislation on savings deposits

National Developments

  •  France: Reverse discrimination between domestic and cross-border situations contrary to constitutional principle of equality
  • Germany: Federal Fiscal Court judgment on the application of the standstill clause to flat rate taxation of domestic investors
  • Italy: Regional Tax Court judgment on capital gains taxation of shares in non-resident taxpayers
  • Poland: Reduced penalty interest rates for investors suffering capital gains taxes in Poland
  • Spain: Amendments to the Spanish Patent box regime
  • Sweden: Currency loss on shares non-deductible under EU law
  • Sweden: Currency loss on receivables deductible under EU law
  • Switzerland: New positions introduced for parliamentary discussion regarding the Swiss Corporate Tax Reform III
  • United Kingdom: High Court allows FIDs claims
  • United Kingdom: EU law challenges to new restitution interest tax provisions

EU Developments

  • EUEuropean Commission presents EU Anti-Tax Avoidance Package (ATAP)
  • EU: February ECOFIN Council sees first public debate on European Commission’s ATAP
  • EU: European Commission launches public consultation on double taxation dispute resolution
  • EU: European Parliament’s Policy Department A publishes new policy analysis papers on EU direct tax topics prepared for ECON
  • EU: Luxembourg EU Presidency’s 6-monthly ECOFIN Council progress report to the European Council on Tax Issues
  • EU: Luxembourg EU Presidency’s 6-monthly progress report on the EU Code of Conduct (Business Taxation) to ECOFIN
  • EU: Netherlands 6-monthly rotating EU Council Presidency EU tax priorities for the first half of 2016

Fiscal State aid

  • Belgium: European Commission final State aid Decision on the Belgian excess profit tax ruling system
  • Germany: EU General Court Judgment on German change of control rules and State aid
  • Netherlands, Belgium, France: European Commission State aid Decisions regarding the corporate taxation of ports
  • Netherlands: Dutch Government appeals European Commission’s Starbucks Decision
  • Spain: European Commission appeals General Court Judgment on Spanish Tax Lease

Read the full newsletter here.

This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Further information about our service offerings in EU taxes:

India’s 2016 budget affects foreign investors and multinational enterprises

The Indian Finance Minister on February 29, 2016, presented the 2016 budget, the third budget released by the current government. The budget proposals would take effect after passing both houses of Parliament and obtaining presidential assent.

Changes included in the budget are:

  • Reduction of the corporate tax rate for domestic companies with total revenue not exceeding INR 50 million (approximately USD 750,000) to 29%.
  • The government is planning to conclude other tax incentives, amongst others the ‘super deductions’ for research and development.
  • To reduce the compliance burden, an amendment was proposed wherein a non-resident or a foreign company who is entitled to receive any income from India or amount on which tax is deductible shall be relaxed from applying PAN and furnish the same. Nevertheless, non-residents still would need to hand-in certain documentation and meet further conditions. The proposed amendment will take its effect from June 01, 2016. Until there is clarification about these parameters, we recommend still applying for a PAN.
  • To encourage indigenous research and development activities, the budget proposes introducing a 10% (plus applicable surcharges) tax rate on royalty income of an Indian resident. The 10% rate would apply only if the Indian resident develops and owns the patent, and the patent is registered in India.

Furthermore, India introduces a three-tiered TP documentation approach – including CbCR, which is largely in line with the BEPS Action 13 except some other provisions and significant penalties in case of violation. The new regime will cover financial years 2016-2017 and the first filing is due by November 30, 2017. The proposed measures also include specification on the affected taxpayers and filing information for members of group companies. Indian-headquartered multinational enterprises (MNEs) with global consolidated revenues exceeding the prescribed threshold (expected to be EUR 750 million) would be required to comply with the CbCR requirements.

Click here for the detailed newsletter regarding the three-tiered TP documentation.

Click here for the detailed 2016 budget newsletter and learn about its impact on foreign investors.

For a deeper discussion of how this issue might affect your business, please contact:

Norbert Raschle
Tel. +41 58 792 1652
Roger Wetli
Senior Manager
Tel. +41 58 792 4571


In September 2015, the modification of the Vaud income tax law (“LI”) has been voted by a large majority of the cantonal Parliament. Following said vote, two extreme left-wing parties launched a referendum against the revised bill. Last week end, the amendments of the bill have been approved by a surpringly vast majority of the voters (87% in favor of the new law).

The elements disclosed in the package that has been accepted can be summarized as follows:

1. Taxation of corporations

  • Abolishment of all privileged tax regimes granted at cantonal / communal level – i.e. mixed company tax regime as well as the holding tax status (provided in art.108, 109 LI). The abolishment of the articles will be effective as from January 1st 2019 onwards;
  • General reduction of the corporate income tax rate applicable at cantonal / communal level. The new rate will lead to a global effective tax rate (including federal, cantonal and communal levels), from January 1st 2019 onwards, of 13.79%;
  • Adaptation of the tax rates applicable to the “minimum tax” (art, 126 LI);
  • Harmonization of the capital tax. Regardless of the type of taxation applied to a company located in the canton of Vaud (art 118 LI), such entity will pay capital tax on the taxable equity at a rate of 0.06% to which communal multiplier will be applied (in general ranging from 2 to 2.5). The possibility to credit on the equity tax the income tax remains possible. This measure will enter into force from January 1st 2016 onwards.

2. Taxation of individuals

  • Rental values determination (deemed income for individuals owning real estate): modification of the lump sum deduction (increase from 20% to 30%) applicable to real estate aged over 20 years. The aim of this measure is to reduce the taxable amount resulting from owning real estate for a long period of time (measure aimed for retired persons to whom rental values represent an important income tax burden);
  • Increase of the lump sum deduction for health, life and accident insurance;

3. Taxation of individual who have the right to benefit from lump-sum taxation

Modification of the lump sum taxation principles as per the modifications voted at federal level. Such taxation principle is applied to non-Swiss resident who do not carry out any lucrative activities in Switzerland. Modifications are as follows:

  • Such regime will not be granted to persons with a Swiss passport. In the past, this was possible for a Swiss citizen to be married to a foreigner who was taking profit of this privileged tax regime and be granted with said regime. It was also possible to request such type of taxation regime for a Swiss citizen returning from abroad to Switzerland in the course of the first fiscal year following the return;
  • Requirements for the lump sum taxation will have to be met by both spouses;
  • Minimal lump sum amount to be determined as follows (maximal amount of the three values mentioned below and will be provided in art 15, al.3 LI):
    – CHF 400’000 of taxable basis;
    – 7 times the rental values of real estate owned;
    – 3 times the costs of lodging – amounts paid for living.
  • From January 1st 2016 onwards, lump sum taxation will also have to cover the wealth tax due by a lump sum taxpayer on its wealth attributable to Switzerland. In the canton of Vaud, it results in an increase of the minimal lump sum amount to CHF 415’000. If the determination as per the rental value or the lodging costs lead to a higher amount, percentage applied on such value or on such costs will be used to reflect wealth tax value in the determination of the lump sum amount.

4. Modification applicable to both corporations and individuals (admin matters only)

  • Payment of the taxes due. The system will be modified for corporations to align it on the one applied to individuals (monthly payment of corporate income tax amount – applicable for FY16 onwards);
  • Formal modifications of the Vaud tax law in order to reflect latest adjustments of the Swiss commercial code – formal requirements regarding the presentation of the financial statements of a company, etc.

5. Further modifications

The above mentioned bill does not include all elements currently under discussion at the federal level (Patent Box, Notional interest deduction, step-up mechanism). However, please note that there will be a transition clause that in case Vaud tax law has not legalized the step up, which will set up tax treatment of hidden reserves after abolishment of special regimes, or other federal tax reform elements into its Cantonal law as per 1 January 2019. Such transition clause will ensure that the introduction of the reduced tax rate and abolishment of special regimes as per 1 January 2019 in Vaud is aligned to the benefits to be introduced by federal tax reform timing wise.

A complete summary of parliamentary debates can be found on PWC newsletter.

EUDTG Newsletter November – December 2015

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various opportunities.

The following topics are covered in this issue of EU Tax News:

CJEU Cases

  • Belgium: AG Opinion on the compatibility of the Belgian Net Asset Tax with EU Law: SPF Finances v. ING International SA
  • Belgium: CJEU referral regarding the “subject to tax” condition of the Parent-Subsidiary Directive: Belgische Staat v Comm. VA Wereldhave Belgium and Others
  • France: CJEU referral regarding the requirement of an advance administrative approval for the application of the Merger Directive tax regime
  • France: CJEU referral regarding the French Parent-Subsidiary Directive anti-abuse rule
  • Germany: CJEU Judgment on German rules on loss recapture/final losses: Timac Agro
  • Germany: CJEU Judgment on the relationship between Article 4 para. 4 of the Germany-Switzerland DTT and the Swiss-EU Agreement on free movement of persons: Bukovansky
  • Sweden: CJEU Judgment on the availability of personal deductions to non-resident taxpayers opting for taxation at source: Hirvonen

National Developments

  • Belgium: Amendments to Belgian legislation following Tate & Lyle
  • Belgium: Extension of the withholding tax exemption on interest income paid to foreign investment companies
  • Belgium: Cayman Tax: tax transparency for “legal constructions”
  • Belgium: Introduction of a new capital gains tax
  • EU: Update on transposition of the EU Parent-Subsidiary Directive’s anti-hybrid provisions and GAAR into Member States’ legislation
  • France: Proposed amendments to domestic dividend taxation regime following Groupe Steria SCA
  • Germany: Judgment of the Lower Fiscal Court of Düsseldorf following Verder LabTec
  • Luxembourg: Amendments to the Luxembourg participation exemption and tax unity regime
  • Poland: Penalty interest on Polish dividend or interest withholding tax levied on non-residents ruled to be in breach of EU law
  • Sweden: Swedish Supreme Administrative Court judgments regarding the compatibility of the taxation of foreign earned equity compensation with EU law
  • Spain: Recent Spanish National High Court of Justice judgments granting late payment interest

EU Developments

  • EU: New Council Directive on mandatory automatic exchange of information regarding cross-border tax rulings and advance pricing agreements adopted
  • EU: 6-monthly ECOFIN Council progress report to the European Council on Tax Issues
  • EU: European Parliament’s own legislative initiative resolution on corporate tax reform/tax rulings adopted
  • EU: European Parliament Special Committee on tax rulings
  • EU: Luxembourg EU Council Presidency publishes working paper with recommendations for EC anti-BEPS Directive
  • Germany: European Commission requests Germany to amend the German inheritance tax rules on special maintenance allowances
  • Netherlands: European Commission requests The Netherlands to     amend the LOB clause in the Dutch-Japanese DTT

Fiscal State aid

  •  Luxembourg: European Commission opens formal State aid investigation into Luxembourg’s tax treatment of McDonald’s
  • Spain: General Court considers the Spanish Tax Lease regime is not State aid
  • Spain: Spanish Supreme Court orders suspension of tax on large retail establishments

Read the full newsletter here.


This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Further information about our service offerings in EU taxes: