On 7 June 2017, Switzerland signed the multilateral agreement on the implementation of tax treaty-related measures to prevent the reduction and transfer of profits (BEPS Agreement, MLI).
According to a press release issued by the Federal Council on 7 June 2017, the multilateral agreement serves to efficiently align double taxation agreements (DTAs) with the minimum standards agreed within the framework of the OECD's Base Erosion and Profit Shifting (BEPS) project.
Switzerland will implement the minimum standards either within the framework of the multilateral agreement or bilaterally by adapting the existing DTAs. Adaptation of the DTAs is initially planned with Argentina, Austria, Chile, the Czech Republic, India, Iceland, Italy, Liechtenstein, Lithuania, Luxembourg, Poland, Portugal, South Africa and Turkey.
According to the press release, the main purpose of the BEPS Convention is to implement the BEPS minimum standards with a reference to DTAs as follows:
- Adaptation of the preamble.
- Inclusion of a clause on abuse of agreement.
- Adaptation of the provisions on dispute settlement under mutual agreement arrangements (adoption of the arbitration clause).
The BEPS Agreement will be submitted for consultation by the Federal Council at the end of 2017 and must pass through the ordinary parliamentary approval procedure before it can enter into force.
The Multilateral Agreement on the implementation of tax treaty related measures to prevent the reduction and transfer of profits (BEPS Convention) as well as a list of Swiss reservations and notifications under Articles 28 and 29 of the BEPS Convention are available here.
