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Swiss Gov't Approves BEPS Multilateral Instrument

Friday, September 21, 2018

The Swiss Federal Council has approved an OECD multilateral convention designed to prevent BEPS-related abuse of the international tax treaty system.

Switzerland signed the convention in June 2017. The convention is aimed at countering tax avoidance strategies that lead to base erosion and profit shifting, in which tax treaty loopholes are used to shift profits to low-or no-tax locations.

The Swiss Federal Council adopted the dispatch on the convention on August 22, after which the dispatch was submitted to parliament.

The convention provides countries with a method for modifying their bilateral tax treaties to implement the new integrity rules.

In the case of Switzerland, the convention will initially amend the double taxation agreements (DTAs) with Argentina, Austria, Chile, the Czech Republic, Iceland, Italy, Lithuania, Luxembourg, Mexico, Portugal, South Africa, and Turkey.

The Swiss Council said that these countries are prepared to agree with Switzerland the precise wording of the DTAs to be adapted via the BEPS convention.

The Council added that through bilateral negotiations Switzerland has already implemented the BEPS minimum standards into its DTAs with Brazil, Latvia, Kosovo, Pakistan, Saudi Arabia, the UK, and Zambia. It said that further DTA revisions are ongoing.