Tax Newsletter Switzerland

On 16 October 2025, the State Secretariat for International Financial Matters (SIF) announced that the competent authorities of Switzerland and Germany have agreed to extend the consultation agreement dated 6 April 2023 regarding the application of Article 15, paragraph 4 of the Double Taxation Agreement between Switzerland and Germany concerning senior executives.

For more information, see the following Link.

On 20 October 2025 in Brussels, Switzerland and the European Union (EU) signed the Amending Protocol to the Agreement on the automatic exchange of financial account information to improve international tax compliance. With the Amending Protocol, the Agreement will be aligned to the amended OECD standard and supplemented with new provisions on administrative assistance for the collection of VAT claims.

For more information, see the following Link.

During its meeting on 5 November 2025, the Federal Council adopted the dispatch on the double taxation agreement (DTA) with Zimbabwe.

The DTA largely corresponds to the Model Convention of the Organisation for Economic Co-operation and Development (OECD) and standard Swiss practice for agreements in this area. It will prevent the double taxation of private individuals and legal entities with an international nexus in the area of income taxes, for example in the case of the taxation of dividends, interest and royalties. The DTA also provides for an anti-abuse clause that is intended to prevent a person who is resident in neither Switzerland nor Zimbabwe from claiming benefits provided for in the DTA. Moreover, the DTA contains an administrative assistance clause in accordance with the current international standard for the exchange of information upon request.

The agreement still has to be approved by Parliament before it can come into force. In Zimbabwe, the competent authority has already approved the agreement.

For more information, see the following Link.

During its meeting on 26 November 2025, the Federal Council amended the ordinance concerning the minimum taxation of large multinational groups. This amendment clarifies the reporting obligations under the international information exchange framework related to the OECD minimum taxation and reduces the administrative burden for enterprises through a centralised filing process.

The minimum tax ordinance has been further amended in the following areas:

• It clarifies the procedure for the international Income Inclusion Rule (IIR) top-up tax when no subsidiaries abroad are subject to low taxation in the relevant fiscal year.
• If a business unit changes canton during the year, the revenues from the top-up tax will be apportioned accordingly.

For more information, see the following Link.

During its meeting on 26 November 2025, the Federal Council adopted the dispatch on the additional agreement supplementing the double taxation agreement (DTA) with Belgium. The agreement implements the minimum standards for double taxation agreements.

In particular, the additional agreement contains an abuse clause which refers to the main purpose of an arrangement or transaction and thus ensures that the DTA is not abused. It also adapts the DTA in some respects to the current treaty policy of the two countries.

The agreement still has to be approved by parliament in both countries before it can come into force.

For more information, see the following Link.

At its meeting on 26 November 2025, the Federal Council approved the amendment of the Ordinance on the International Automatic Exchange of Information in Tax Matters (AEOI Ordinance). The ordinance contains implementing provisions on amending the Federal Act on the International Automatic Exchange of Information in Tax Matters (AEOIA). Both pieces of legislation are due to come into force on 1 January 2026.

For more information, see the following Link.

During its meeting on 26 November 2025, the Federal Council adopted the dispatch on the protocol of amendment to the double taxation agreement (DTA) with Croatia. In particular, the protocol of amendment contains an abuse clause which refers to the main purpose of an arrangement or transaction and thus ensures that the DTA is not abused. It also contains an administrative assistance clause in accordance with the international standard for the exchange of information upon request.

The agreement still has to be approved by parliament in both countries before it can come into force.

For more information, see the following Link.

Stay ahead of latest developments on Pillar Two implementation. Our Country Tracker provides the status of Pillar Two implementation in different countries and regions as well as a comprehensive summary of compliance and registration deadlines.

You can access the tool at the following link.

For ongoing updates from the international tax world, we recommend our international Tax News, which you can access at this link.

On 19 December 2025, the Swiss Parliament adopted a significant change to the tax loss carry forward rules: going forward, the tax loss carry forward period shall be extended from 7 to 10 years (Federal and cantonal level). The new carry forward period shall apply to losses incurred from the tax period 2020, which includes the years affected by the COVID-19 crisis. Losses from previous tax periods (2019 and earlier) would remain subject to the current 7 year limit.

Important: while the Swiss Parliament has approved the new law, it is currently subject to a 100-day optional referendum period (until 17 April 2026). As such, the law is not enacted yet. Subject to the absence of a successful referendum, entry into force is envisaged for 1 January 2028 (but the date still needs to be formally set by the Federal Council).

The documentation of the Parliament can be found under the following link.

As of January 1, 2026, Refinitiv SA will no longer be recognised by the Swiss Federal Tax Administration (ESTV) as an authorised data supplier for classifying taxable documents related to securities turnover tax. Securities turnover tax is a self-assessment tax requiring domestic securities dealers to classify documents as taxable or non-taxable. Until the mentioned date, entities can utilise data from an ESTV-recognised supplier like Refinitiv SA. Starting January 1, 2026, only SIX Financial Information AG in Zurich will hold this status for providing data related to turnover tax. Companies should prepare for this change to ensure compliance with tax regulations. For more information, visit the ESTV announcement under the following link. 

On October 14, 2025 the Swiss Federal Tax Administration has updated the table overview of tax policy proposals and initiatives. The overviews can be found under the following link.

On November 21, 2025, the Swiss Federal Tax Administration released updated lists of legislative and regulatory changes affecting direct federal tax, VAT, withholding tax, and stamp duties for the years 2026-2028, including both finalised and ongoing projects. The publication can be found under the following link.

The Swiss Federal Tax Administration has updated the price lists and the bonus share lists for 2023 to 2025. The lists can be found at the following link.

The dossier on tax penalties and subsequent taxation, updated on October 9, 2025, details penal provisions for tax offenses and procedures for subsequent taxation, including specific measures by the ESTV. More details can be found under the following link.

On December 11, 2025, the Swiss Federal Tax Administration updated the article titled "Wesentliche Züge der schweizerischen Steuerordnung," which discusses the fundamental aspects of the Swiss tax system, including the impact of federalism, varied tax sovereignties, and the national fiscal equalisation.

On November 20, 2025, the Swiss Federal Tax Administration released the 2022 tax statistics for individuals and entities, detailing direct federal tax results at communal, cantonal, and national levels. Details can be found under the following link. 

Luzern is repositioning itself for the future and is planning, among other things, the introduction of the Luzern Innovation Contribution (LIB) as part of the Luzern Economic Development Package. This will provide companies with incentives to strengthen innovation and sustainability in the canton of Luzern.

The amendment to the law will be dealt with in the public vote on 27 September 2026. If approved, the law will enter into force on 1 October 2026.

Who benefits?
Companies that:

• Are registered in the Lucerne commercial register;
• Have a sustainability report and an ordinary audited annual financial statement;
• Conduct basic research, industrial research or experimental development.

What is funded?
Expenses for innovation and R&D can be credited to the tax amount as follows:

• 30% for R&D personnel;
• 20% for investments (depreciation);
• 10% for contract research.

How do I proceed?

• Applications must be submitted to the cantonal administration, Department District and Economic Affairs.
• Submission deadline 30 April*
• Decision by 30 September
  *from claim year 2027, different deadlines apply for 2026

PwC offers assistance to help companies assess eligibility and maximise benefits under this potential new funding opportunity. For further information please see our flyer.

Zug is repositioning itself for the future and is introducing subsidies for innovation and sustainability under the Location Development Act (GSE). This will provide companies with incentives to strengthen innovation and sustainability in the canton of Zug.

On 30 November 2025, the people of Zug approved the GSE. The law will come into force on 1 January 2026.

Who benefits?
Companies and branches with a tax affiliation to the canton of Zug.

What is being funded?
Innovation funding on the expenditure side:

• 25% on R&D personnel expenses and expenses for clinical trials in Switzerland.
• Flat-rate supplement of 35% on R&D personnel expenses for infrastructure expenditure.

Sustainability funding:

• Emissions savings of at least 50,000 tonnes of CO2eq p.a. (in Scope3.1 GHG)
• CHF 30 is paid for each tonne of CO2eq saved.

How do I proceed?

• Applications must be submitted electronically to the Finance Department of the Canton of Zug.
• Applications can be submitted for the first time from 1 March 2026 until31 May 2026 (for applications based on the 2024 financial year).
• Payment/crediting will take place in the same calendar year (for the first time in 2026).

PwC offers assistance to help companies assess eligibility and maximise benefits under this new funding opportunity. For further information please see our flyer.

The guidelines on tax relief for corporates have been updated. The new provisions include a fixed tax reduction for up to ten years, with taxable income reduced by up to 40%, effective immediately. Further information can be found under the following link.

Published on December 18, 2025, Canton of Nidwalden will no longer allows general provisions for major repairs from January 1, 2026, and existing provisions must be dissolved by December 31, 2030. Instead, starting January 1, 2026, general provisions for fluctuation reserves of publicly traded securities will be permitted. Further details can be found under the following link.

The update to the Guide to Tax Exemptions for Associations and Foundations primarily clarifies the practice of the Geneva Cantonal Tax Administration regarding the compensation of members of an association’s committee or a foundation’s board. Moreover, it outlines the following:

• Institutions that carry out activities partly or entirely abroad may benefit from a tax exemption;
• Support through entrepreneurial financing may be accepted.

Further details can be found under the following link.

Basel Land

The Cantonal Council of Basel-Land has set the 2026 rates for refund and late-payment interest, lowering the refund interest rate to 0.1% and the late-payment interest rate to 5.0%.

Appenzell-Ausserrhoden

• Cantonal tax multiplier. The cantonal tax multiplier in 2026 will remain unchanged at 3.3 units. Certain communal multiplier will be adjusted for 2026.
• Interest on tax payments (2026). The interest rate for provisional taxes paid either early or late remains 1%. The late payment interest of final tax assessments remains 5%. Early payment of taxes continues to be advantageous.

Uri

The government council of the Canton of Uri has annually set the tax-related interest rates for 2026, lowering the compensation and refund interest rate to 0.25% (from 0.5% in the previous year) while maintaining the default interest rate at 4.0%, resulting in corresponding changes to the tax collection regulations.

Enclosed you will find a selection of the Swiss Federal Court (SFC), that may be of interest to you:

• SFC dated March 21, 2025: The Federal Court ruled on Capital Contribution Reserves (KER) with the following decisions:
  • The WHT exemption for KER under Art. 5 para. 1bis VStG presupposes that capital contributions are presented on a separate account in the statutory financial statements by repayment time at the latest (constitutive condition).
  • A distribution that falls due before notification to the SFTA triggers WHT at maturity. Subsequent notification or later SFTA confirmation does not retroactively extinguish the WHT claim. There is no retroactive cure.
  • Inheritances can qualify as capital contributions based on net equity inflow.
  • Two conditions for WHT-free treatment: KER shown in financial statements, changes notified to SFTA, but doesn't need confirmation; timely notification is prudent.

• SFC dated October 23, 2025: The Federal Court ruled that a holding company registered in Zug is fully taxable in Canton Zurich due to the provision of its board of directors by a group company with premises in Zurich, despite having negligible infrastructure costs at its registered office in Zug.

The European Court of Justice (ECJ), in its judgment of December 3, 2025 (Case T‑646/24), held that the simplification rule for intra‑Community triangular transactions under Article 141 of the EU VAT Directive 2006/112 also applies when:

• 4 parties are involved, and 
• The goods are not delivered physically to the intermediary but directly to the final customer.

Recommendation: The ECJ’s decision provides legal certainty even where four parties are involved, provided the other conditions are met. We recommend continuously assessing whether there are indicators of VAT fraud. This includes ongoing monitoring of business partners and appropriate documentation of the due‑diligence procedures carried out.

Non-EU businesses were allowed to use customs procedure 4200 when importing goods in France followed by subsequent intra-EU supplies by appointing a temporary fiscal representative ("mandataire ponctuel") to fulfill the related reporting obligations in France.

The procedure was abolished as of January 1, 2025, and a transitional period until December 31, 2025, was granted.

Starting from January 2026, taxable persons not established in the EU (for example CH and UK companies) should register for VAT in France due to the importation of goods and subsequent intra-EU supplies of goods carried out from France.

An ordinary fiscal representative must be appointed.

As of November 13, 2025, an updated Annex I to the Executive Order 14361 (modifying scope of tariffs on Brazil) now removes designated agricultural (such as meat, meat parts, tomatoes, fruits, coffee, green tea) and non-agricultural products (such as coal, benzene, natural and petroleum gases or aluminum and steel for aircrafts) from the reciprocal duties. Furthermore, as of the same date the scope of reciprocal tariffs on agricultural products was narrowed so that specific agricultural products are no longer subject to tariffs.

In last quarter of 2025, besides Switzerland and Lichtenstein few other countries reached a trade deal with the US. These deals assume maintenance of 19% reciprocal tariffs on goods originating in Malaysia, Cambodia and Thailand (except certain products eligible for zero rates), 20% reciprocal tariffs on goods originating in Vietnam (except certain products eligible for zero rates).

The United States announced joint frameworks for Agreements on Reciprocal Trade with El Salvador, Ecuador, Argentina, and Guatemala that commit these partners to reduce non‑tariff barriers, enhance IP, labor, environmental and digital trade disciplines, and align on economic security, while the U.S. will remove reciprocal tariffs on certain goods not sufficiently produced domestically and on some CAFTA‑DR textiles and apparel from El Salvador and Guatemala.

Furthermore, in last quarter of 2025 the court hearings concerning tariffs imposed based on the International Emergency Economic Power Act took place. It is expected that the court will rule on this case at the beginning of January 2026. 

The European Centralised clearance for export (CCI) system allows trusted traders file a customs declaration with the supervising customs office in their own Member State, even when the goods are presented in another Member State, enabling coordinated digital processing and physical release.

Businesses must hold a CCI authorisation under Article 179 UCC, obtained from the customs authority in their Member State of establishment; the Commission has released updated CCI Full Business Guidance and eLearning modules to support onboarding and compliance. 

Belgium and Sweden joined the EU CCI on 15 October 2025, bringing coverage to 12 Member States; Belgium operates Phase 1 (standard declarations, incl. pre‑lodged), while Sweden runs Phase 1 plus selected Phase 2 features (excise goods and trade with special fiscal territories).

By 30 Jun 2025, seven Member States had deployed Phase 2 and entered “CCI Full” operations (Bulgaria, Estonia, Spain, Luxembourg, Latvia, Romania, Croatia), enabling centralised clearance for simplified/supplementary declarations and entry in the declarant’s records, and extending scope to excise and special fiscal territories.

Additional Member States are to join in the coming months; companies should track national go‑live plans, prepare IT/processes for pre‑lodged standard declarations, and plan for Phase 2 capabilities as each country upgrades to the CCI Full system. 

Initial situation: Premium cigars were placed under customs warehousing in Spain following a first sale that led to EU introduction; a second sale occurred before release for free circulation using the simplified “entry in the records” procedure. The importer declared the value based on the first sale.

Question at hand: In this warehousing/entry‑in‑records setup, (i) what is the relevant time for determining customs value, and (ii) may the first‑sale price be used when that sale led to EU introduction for warehousing?

Decision and reasoning: When goods are released using entry‑in‑records and the rules of assessment were ascertained or accepted at warehousing, the relevant valuation time is the warehousing date. In that configuration, if a first sale led to EU introduction for warehousing, the first‑sale transaction value may be used without additional “for export” proof, relying on Article 147(1), first subparagraph. This serves the objective of neutral valuation reflecting the goods’ real economic value.

From 2026 the EU will remove the low‑value consignment relief and introduce a temporary mechanism to calculate and collect customs duties on e‑commerce parcels, ahead of the full customs reform and the EU Customs Agency/Data Hub going live in mid‑2028 - companies selling into the EU should plan for duty liabilities on low‑value orders, update pricing and checkout systems, and ensure data and compliance processes are ready for the interim and the later transition.

Changes in practice

• No duty-free low-value imports: Parcels under €150 from non-EU sellers will be subject to customs duties in addition to VAT and declarations.
• Simplified duty calculation (2026–2028): Temporary, streamlined calculation methods will apply until the Data Hub enables full functionality.
• Data-led enforcement by 2028: The EU Customs Data Hub will underpin automated duty calculation and risk management once live.

BFH overturned FG München (14 K 588/20) and remanded for fact‑finding on whether related‑party influence affected the price at import.

The question which was evaluated: Whether post-import, lump-sum upward transfer pricing adjustments indicate that the originally declared transaction value was influenced by related-party affiliation, rendering the transaction value method (Article 70 UCC) inapplicable and triggering recourse to secondary valuation methods (Article 74 UCC).

The present legal dispute has not been definitively decided due to the lack of factual findings. Nevertheless, the legal guiding principle is clear:

• For related parties, transaction value can be used only if the price at import is arm’s length;
• An upward year‑end TP adjustment is an indicator that the original price may have been influenced by the relationship.

What it means in practice:

• More risk that customs challenge related‑party prices at import;
• Possible switch away from the declared invoice price to alternative valuation (often higher duties).
• Stronger expectation to prove that the price was arm’s‑length when the goods crossed the border.

In the EU, we are currently facing significant updates in the ESG (Environmental, Social, and Governance) tax landscape. In terms of packaging, the EU published in January 2025 the new Regulation of Packaging and Packaging Waste (PPWR) in order to reduce packaging waste, promote reuse and recycling, and enhance resource efficiency. It aims to create a circular economy by reducing dependency on primary resources and encouraging sustainable packaging solutions.  The regulation will be fully operational in August 2026 and include among others, restrictions on hazardous substances in packaging (per- and polyfluorinated alkyl substances or PFASs) to protect consumer health and the environment, implementation of Extended Producer Responsibility (EPRs).  The Regulation focuses on packaging waste reduction by encouraging reusable and refillable packaging solutions. In terms of requirements, based on the new regulations, all packaging placed on the EU market should be designed for recycling by 2030 and recycled at scale by 2035 according to recycling performance grades (A (95%), B (80%), C (70%) & Non-Recyclable) and recycled at the scale score. Companies will be required to optimise the packaging flow as well as to redesign their packaging and comply with the new requirements.

In terms of Carbon Border Adjustment Mechanism (based on the latest updates due to the Omnibus proposal) a de minimis threshold of 50 tonnes mass and simplifying compliance for small importers which are below the threshold are noted. Importers who are in scope of CBAM will need to apply for authorised CBAM declarant status to continue importing CBAM goods from January 1, 2026. The application process for authorised CBAM declarants began in March 2025. 

On 17 December 2025, the European Commission published implementing acts on the calculation methodology, the free allocation adjustment, customs communication, default values, the price of CBAM certificates, verification principles, the authorisation of declarants, the CBAM registry, as well as accreditation and verification. The documents were published just days before the start of the definitive phase on 1 January 2026.

While the published documents include many important details, the key actions for businesses include:

• Apply for the status of authorised CBAM declarant by the end of 2025 to be able to import CBAM goods from 1 January 2026.
• Collect the required trade and emissions data in 2026 to be able to file their CBAM declaration in 2027.
• Buy CBAM certificates in February 2027 to offset their 2026 imports (backward-looking) as well as their ongoing imports (forward-looking).

Please do reach out to us to discuss these topics and in particular the establishment of governance processes, technology-enabled data collection procedures, and the creation of a strategic financial plan for 2026.

We are also excited to announce that we will be hosting a webinar on the CBAM on 4 February 2026. This is a great opportunity to gain insights into the latest developments and implications of CBAM from industry experts. Learn about the latest regulatory updates and uncover strategies that turn regulatory investments into business opportunities. Don’t miss out - register here to secure your spot today!

In December 2025, the European Parliament and the Council formally adopted simplification measures to the EU Deforestation Regulation (EUDR). These changes are designed to simplify implementation and ensure that operators, traders, and competent authorities are well-prepared for the Regulation’s application.

Key elements of the simplification measures include:

• Additional year postponement for all companies: large operators and traders need to comply starting 30 December 2026, while small operators will need to comply starting 30 June 2027.
• Simplification of due diligence requirements
• Scope adjustment: Printed media products have been removed from the scope of the regulation

We are hosting a webinar on 21 January 2026 to provide the latest updates on the EUDR. This session will cover key changes, compliance requirements, and what they mean for your business. Reserve your spot now - register here to stay informed!

The Swiss Federal Tax Administration has updated their VAT-Info 09 concerning input VAT corrections. Three important points have been adjusted:

• Input tax deduction for holding companies: Extensive changes for companies that have another business activity in addition to their holding activities. It is strongly recommended to examine this more closely.
• Input VAT correction due to exempt turnover: New requirements for applying the flat-rate of 0.02%.
• Newly established companies: It has been clarified that input VAT can be claimed on costs incurred prior to the company's establishment, provided these costs are no older than six months before registration in the commercial register and specific requirements are met. This also applies if the invoices are not issued in the name of the person registered in the commercial register.

The Swiss Federal Tax Administration has revised form no. 764 for the application of the notification procedure.

This form must be used with immediate effect for all asset transactions (both mandatory and voluntary applications of the reporting procedure).

In mandatory applications, signatures from the parties involved will no longer be required.

However, in voluntary applications, the legally binding signatures of both parties are still required.

At its meeting on December 5, 2025, the Federal Council submitted amendments to the Value Added Tax Act for public consultation. The proposal is primarily intended to implement two parliamentary initiatives:

• The extension of platform taxation to electronic services (Motion WAK-S 23.3012); and
• Adjustments to the taxation of combined services (Motion Engler 18.3235).

The consultation period will last until March 19, 2026.

The court held that input VAT on services received in earlier years can be claimed in a later period, provided the invoice is received and the recipient is VAT-registered at that time, even if the recipient previously used the flat-rate method.

Please note that this decision was appealed by the FTA to the Federal Supreme Court.

Companies switching from the flat-rate to the effective method may still recover input VAT on past services if invoiced later and all requirements are met. We recommend reviewing historical transactions and invoicing practices after the method change to identify potential input VAT claims. 

The court ruled that a series of hotel renovations over several years did not qualify as a single “major renovation” for VAT input tax correction purposes, as there was no unified project plan; only value-adding investments were eligible for input tax recovery. 

Consequently, it is important to note that input tax correction for property renovations is only possible for clearly documented, value-adding investments or unified major renovation projects.

It is crucial to maintain comprehensive project documentation and distinguish between maintenance and value-adding works to maximise VAT recovery. 

The United States, Switzerland, and Liechtenstein announced a non‑binding framework to negotiate an Agreement on Fair, Balanced, and Reciprocal Trade, aiming to begin immediately and make significant progress - ideally concluding - by the first quarter of 2026, subject to domestic processes. 

It was officially announced by the Swiss Government authorities, that the United States will cap tariffs on Swiss‑origin imports at 15% (see details below), retroactive to 14 November 2025 (replacing the prior 39% additional duty). US CBP published the guidance confirming that 15% tariff rate is applied starting from November 14, 2025 and provides details regarding refunds for the previously submitted entries.

Investment: Switzerland and Liechtenstein plan to facilitate major new US investment by their firms - Switzerland targeting at least $200 billion over five years and Liechtenstein at least $300 million - with an emphasis on manufacturing and R&D jobs, apprenticeship/training programs; the US will factor these steps into its application of reciprocal tariffs. 

Tariff rates: Switzerland and Liechtenstein intend to provide zero duties on all US industrial goods, US seafood, and certain agricultural goods, plus tariff‑rate quotas for additional US agricultural products; the United States intends to apply the higher of MFN or a cumulative 15% tariff on originating goods from Switzerland and Liechtenstein (with equal treatment for both due to their customs union) and cap combined MFN and Section 232 duties at 15% for pharmaceuticals and semiconductors. 

Non-tariff barriers: The framework targets non‑tariff barriers by pursuing fair treatment of conformity assessment bodies, facilitating recognition of US Federal Motor Vehicle Safety Standards, easing acceptance of FDA‑cleared medical devices, streamlining sanitary and labelling requirements for beef, bison, dairy, addressing restrictive measures on poultry, strengthening intellectual property protections (including fair treatment of geographical indications), enhancing services market access, advancing good regulatory practices, clarifying government procurement reciprocity, and digitising customs processes.    

Digital trade and economic security: The participants intend to refrain from digital services taxes, enable trusted cross‑border data flows and oppose data localisation, support a permanent WTO moratorium on duties for electronic transmissions, and deepen cooperation on sanctions, export controls, inbound investment screening, and supply chain resilience; they also intend to ensure benefits accrue predominantly to the participants and to adjust rules of origin if necessary.

Scope and timing: The EFTA–India Trade and Economic Partnership Agreement (TEPA) was signed on 10 March 2024 and entered into force on 1 October 2025; it covers trade in goods and services, investment promotion, intellectual property, government procurement, competition, trade and sustainable development, and dispute settlement, with an institutional Joint Committee to oversee implementation. 

Tariff liberalisation: India grants improved market access covering almost 95% of current Swiss exports by value, including full tariff elimination after transition on 84.6% of Swiss exports and partial concessions on a further 10.1%; sensitive items such as gold and certain agricultural products are excluded or phased; EFTA states maintain zero duties on imports of industrial goods, fish and other marine products originating in India.  

Services and market access measures: TEPA includes extensive services commitments and mobility facilitations (for example, stay of up to 90 days for installation/maintenance personnel), and provides clearer pathways for financial services licensing; India commits to raise foreign equity caps in banking to 74% and allow up to 49% in insurance for EFTA investors, enhancing legal certainty for market entry.  

Rules of origin, procedures, and dispute settlement: Preferential treatment requires meeting TEPA rules of origin with acceptable proofs (origin declaration by approved exporter, certificate of origin, or movement certificate EUR.1); customs and trade facilitation chapters streamline procedures, while disputes are resolved state‑to‑state under TEPA’s arbitration framework, with no investor–state dispute settlement mechanism.

E-dec Export is being replaced by Passar Export with a firm deadline of 1 January 2026; in justified cases, a one-time extension to end of January may be granted. The procedure and legal conditions for correcting customs declarations still submitted in e-dec Export remain unchanged. However, if a customs declarant no longer has access to e-dec Export due to the transition to Passar, the FOCBS will make the adjustment of the customs declaration on behalf of the customs declarant without additional charges.

For Passar 2.0 import declarations starting this year, the activation of the goods declaration (formerly customs declaration) must occur via the automated process rather than over the counter. Additionally with Passar Import, the ZAZ account used for declaration in e-dec Import will be replaced by a single, entity-specific debtor status; Swiss entities generally will no longer need to provide a security, while foreign entities still must.

Previously, the FOCBS delivered customs data from the systems e-dec Import/Export and NCTS upon request to companies. This practice will not be continued. The FOCBS claims that it has no statutory basis to regularly prepare or deliver company data respectively no legal task or obligation to provide the companies with (their own) data. Additionally, past deliveries also affected third-party data. Companies must themselves retain their assessment data (customs declarations, accompanying documents, rulings, etc.) pursuant to customs legislation.

From March 2026, the FOCBS will offer a web-based solution for the digital issuance of the EUR.1 certificate of origin. Operators need the “freight” role in the ePortal to capture data, must explicitly reference the digital EUR.1 in Passar Export, and the validation will occur automatically upon activation of the export declaration, eliminating the need for manual validation at customs counters. This Swiss solution serves as a transitional measure until a Europe-wide common solution is implemented. In the initial rollout, the digital EUR.1 will be available for countries participating in the revised PEM Convention and, likely, China and India.

The public consultation on ordinances complementing the revised Customs Act is expected in the first half of 2026.

A decisive court ruling in Sweden has solidified a trend in in EU pharmaceutical regulations, confirming that purely financial transactions are now officially considered wholesale activities. This means any company that buys or sells the title to medicines within the EU, even without physically touching them, must hold an EU wholesale distribution authorisation (WDA). If your operating model involves a non-EEA entity, like a Swiss headquarters, handling financial ownership, your entire supply chain may now be at risk of non-compliance.

This ruling aligns with a growing consensus from German courts and the EU Court of Justice, creating an unmistakable new standard that will soon be cemented into law with Article 166 of the proposed pharmaceutical directive. The EU is demanding full accountability, requiring both the physical and financial paths of medicines to be situated within the Union. This raises an urgent question: is your company prepared for this shift?

While these changes challenge are a challenge for non-EU based pharmaceutical companies, they don’t necessarily spell the end for strategically valuable international structures. Compliant, pressure-tested solutions exist that can preserve your operating model while satisfying the new rules. To understand the full implications and discover how to adapt, read our complete analysis.

Read our full publication: Link 

Find out more about Article 166 of the proposed pharmaceutical directive: Link

Overview: Recent US tariff increases have materially affected Swiss-origin goods, with rates around 39% versus roughly 15% for EU goods. A 14 November Joint Statement signals a prospective cut to 15% for Swiss-origin products, restoring competitiveness relative to the EU but still well above the historically low single-digit levels. Following a subsequent late-year announcement, the 15% rate is expected to apply retroactively, and companies will be able to claim refunds for overpaid duties. The resulting shifts in cost structures and planning effort elevate the need to evaluate transfer pricing alongside customs valuation, tariff classification, and origin determination in an integrated manner.

Details: The prospective 15% rate notably eases pressure in pharma and medtech-sectors previously exposed to particularly high duties-while the risk of tariffs up to 100% appears averted for now. However, the Joint Statement remains vague in key respects, including US requests for domestic drug price reductions, leaving the contours of the forthcoming trade arrangement uncertain. With the retroactive application and refund mechanism announced near year-end, importers should assess prior entries to identify overpayments and plan the operational path to recover duties in coordination with customs and finance teams.

Against this backdrop, companies are re-assessing options such as transfer price adjustments, use of the first-sale rule, and origin planning. Although routing via third countries may now be less attractive given the anticipated 15% Swiss rate, US non-preferential origin rules still require substantial transformation in the origin country; mere assembly or packaging elsewhere typically does not confer origin. Where value creation remains predominantly in Switzerland, alternative routing often continues to attract US duties. The retroactive change reinforces the importance of aligning any year-end or post-import transfer pricing adjustments with customs valuation rules and documenting impacts on duty recovery.

Businesses should:

• Re-model landed costs and margins based on the prospective 15% tariff rate and the retroactive application.
• Align intercompany pricing with customs valuation rules and re-evaluate first-sale structures in light of the new rate and any year-end TP adjustments.
• Refresh origin and classification analyses to reflect any supply chain changes and monitor details of the final US-Switzerland trade agreement.

For further information, read our blog article here.

The OECD has shared its 2024 Mutual Agreement Procedure (MAP) and Advance Pricing Agreement (APA) statistics, highlighting consistent resolution times and a rise in APA usage to prevent disputes.

Key statistics from the latest OECD report include:

• Average MAP resolution times remain stable at 27.4 months, with transfer pricing cases improving to 30.9 months.
• Switzerland ranks 1st for the shortest time to reach agreement in MAPs 
• Bilateral APA usage is growing, with 80 jurisdictions now permitting them and APA filings rising by 3%.
• In 11 jurisdictions, APAs represent over half of the bilateral transfer pricing caseload, underscoring a focus on dispute prevention.

For full details, see the OECD announcement:

Link

The OECD has released the third batch of updated Transfer Pricing Country Profiles, expanded coverage and introduced new insights on hard-to-value intangibles and the simplified distribution approach.

Now covering 83 jurisdictions, the profiles provide details on the hard-to-value intangibles rules and the simplified distribution approach.

New jurisdictions include Cabo Verde, Guatemala, Thailand, United Arab Emirates, and Zambia.

Learn more here:

Link

France has announced it will not implement Amount B domestically for fiscal years starting 1 January 2025 but will respect Amount B outcomes from covered jurisdictions under applicable tax treaties.

While France will not apply Amount B domestically, it will accept outcomes from other covered jurisdictions under relevant tax treaties. Groups with distributors in such jurisdictions interacting with France should consider Amount B in their TP planning.

Read the official release (in French):

Link

Slovakia's Ministry of Finance has updated its transfer pricing documentation requirements and introduced a revised corporate tax return with more detailed related-party transaction reporting.

The 2025 guidelines and new tax return form require expanded disclosures and more granular data on related-party transactions, signalling increased audit scrutiny. Taxpayers should update FY2025 local files to include the expanded content and begin data mapping for the new transaction tables.

Read the official release (in Slovak):

Link

Overview: The 2025 OECD update clarifies Article 9 and Article 5, reinforcing an “accurate delineation first” approach, linking intra‑group financing to Chapter X, distinguishing treaty profit allocation from domestic deductibility, refining corresponding adjustments/MAP (including “Amount B”), and addressing when remote work/home offices may constitute a PE.

Key clarifications include:

• Article 9: Adjustments apply only if conditions are not arm's length. Intra-group financing requires accurate delineation first, and deductibility remains a domestic law issue. Corresponding adjustments should align with arm's length outcomes and Amount B where adopted.
• Article 5: Remote work does not automatically create a Permanent Establishment (PE); a fixed place with permanence and substantive activity is needed. As a general guide, homeworking under 50% of the time over 12 months is unlikely to create a PE.

Businesses should:

• Emphasise an "accurate delineation first" approach, especially for financial transactions.
• Update TP documentation, financing analyses, and MAP positions to reflect the new guidance on loan characterisation and deductibility.
• Review remote-work models against the clearer treaty guardrails provided by the Article 5 updates.

Overview: The European Commission concluded that Luxembourg’s 2003 APA for Amazon is not State aid under Article 107(1) TFEU, closing a high‑profile case.

Details: The Commission reversed its initial challenge after the CJEU’s judgment. It concluded that because Luxembourg law did noformally t edded the arm’s length principle at the time of the APA (pre-2017), there was no domestic reference framework to establish a selective advantage.

Practical implications: Selectivity challenges based on transfer pricing require a clear domestic arm’s length reference. Member States that have recently codified TP rules may face closer scrutiny; analyses must be anchored in the law applicable at the time.

For full details, see the link. 

Overview: The Commission’s second evaluation of DAC (DAC1–DAC6, 2018–2023) confirms stronger tax transparency and cooperation but highlights complexity and burdens — especially under DAC6.

The evaluation highlighted DAC6 as overly complex, with divergent local rules. Key developments include:

• Commission plans: Simplify and consolidate DAC instruments, harmonise penalties, and improve data use.
• Proposed new hallmarks: Member States suggest targeting TP mismatches, real-estate structures, and IP transfers.

Practical implications: Expect new or refined DAC6 hallmarks for TP‑heavy arrangements (e.g., IP migrations, mismatch outcomes). Prepare governance, data capture, and disclosure processes for additional reporting triggers.

For full details, see the link.

Overview: Canada’s Bill C‑15 would overhaul section 247 for years beginning after 4 November 2025, embedding accurate delineation, expanding recharacterisation, and tightening documentation/timelines.

The bill introduces several key changes:

• Codifies the "accurate delineation first" approach based on "economically relevant characteristics."
• Expands the CRA's ability to recharacterise or disregard transactions that are not arm's length.
• Adopts a static reference to the 2022 OECD TP Guidelines and tightens documentation rules and deadlines.

Practical implications: Expect more OECD‑style scrutiny of delineation and realistic alternatives. Align Canadian local files with global documentation, strengthen financing/intangibles/services analyses, and prepare for tighter timelines and penalties.

For further information, please see the article published by PwC Canada - Link

Overview: On 4 September 2025, the Court of Justice of the European Union (CJEU) set key parameters for the VAT treatment of year-end transfer pricing adjustments within groups. The decision addresses when TNMM-based true-ups constitute consideration for services and clarifies the evidentiary expectations on taxpayers while limiting tax authorities’ scope to challenge business purpose for VAT.

Details: The case involved a Romanian distributor remunerated under a TNMM range by its Belgian parent. Year-end adjustments were made to bring the distributor's margin within the agreed range. The Romanian tax authority challenged the VAT treatment of these adjustments.

The CJEU held that year-end adjustments are consideration for services if they relate to actual services supplied and are based on a pre-agreed, determinable pricing mechanism. While authorities can demand robust evidence of the supply, they cannot challenge the economic appropriateness of the services for VAT purposes.

Taxpayers using TNMM true-ups should:

• Align VAT and transfer pricing frameworks with clear agreements, contemporaneous service evidence, and consistent TNMM application.
• Maintain documentation to prove services were rendered for taxable outputs and apply reverse charge correctly.

Find more information under CJEU - Judgment of 4 September 2025 (CURIA) and Transfer Pricing Perspectives DACH – Ausgabe 68

Overview: Hungary is introducing a new transfer pricing decree with optional application from FY 2025 and mandatory from FY 2026, significantly tightening local documentation and audit expectations. Transfer pricing is a clear enforcement priority, with TP competence centres established; centrally prepared Local Files and benchmarks that are not Hungarian‑compliant frequently lead to penalties.

Details: Key changes include:

• Mandatory benefit test for all intra‑group services (including financial), evidenced at the recipient level.
• Compulsory fully segmented P&Ls by transaction type with no unallocated items, applicable also to foreign tested parties; reconciliation to statutory accounts required.
• Expanded functional analysis covering all OECD comparability factors and DEMPE for intangibles.
• Revised local thresholds (e.g., higher Local File thresholds) and explicit inclusion of cash transfers in scope.
• Substance‑over‑form recharacterisation: transactions can be treated as related‑party even when invoiced to third parties if related entities are functionally involved.
• Hungarian‑prescribed benchmarking: strict independence/activity filters, 3‑year data, specific loss rules, and staged geographic expansion (Hungary → EU → broader regions), making many group‑wide studies unacceptable without local adjustment.
• Simplified documentation available for low value‑adding services, cash transfers, and cost recharges, but only if strict qualitative criteria are met and a 5% actual mark‑up (providers) or max 5% (recipients) is demonstrated via segmented P&Ls.

Practical implications:

• Plan now for 2025/2026: run a 2025 dry‑run, rebuild benchmarks using the Hungarian search strategy, and implement segmented P&Ls for priority transactions.
• Upgrade systems and controls: ensure ERP/reporting support transaction‑level allocations with no residuals; maintain audit‑ready allocation keys and reconciliations.
• Strengthen service files: maintain contemporaneous, recipient‑level benefit evidence; align methods, cost bases, and mark‑ups with segmentation.
• Enhance DEMPE documentation: keep R&D/IP governance records aligned with actual conduct and risk control.
• Anticipate local‑only benchmarks: expect to re‑run or adjust global studies; maintain full audit trails and sensitivity analyses.

For full details, see PwC’s summary:

Link

As we enter the new year, we would like to provide you with a concise overview of the most important updates in our 2025/2026 HR Update to ensure you are fully informed and well-prepared. You can access the full update by clicking here.

The Swiss Federal Tax Administration released the "Quellensteuertarife 2026" circular letter on October 28, 2025, outlining the withholding tax tariffs for the upcoming year. The circular letter can be found under the following link.

In December 2025, the Swiss Federal Tax Administration published the withholding tax tariffs for 2026, with specific tariff files prepared for wages and for other incomes by all cantons. Details can be found under the following link.