OECD Alignment in Swiss and Maltese Transfer Pricing

Switzerland: Guidance Issued by the Swiss Tax Conference & the Swiss Federal Tax Authority

• Effective since January 23, 2024.

• Overview: A comprehensive paper that references and aligns with the OECD TP Guidelines to aid in interpreting the arm's length principle.

• Scope: Discusses comparability analysis, method selection, and the handling of intangibles, services, and financial transactions.

• Exclusions: Does not cover cost contribution arrangements and business restructurings.

• Recommendations: Encourages Swiss companies to file transfer pricing ruling requests and prepare comprehensive documentation.

• Documentation: Mandatory country-by-country reporting is required for groups with turnover exceeding CHF 900 million, adhering to OECD standards.

Malta: Introduction of New Transfer Pricing Framework

• Applies from January 1, 2023.

• Details: Implemented through Legal Notice 284 of 2022, this new framework aligns Malta’s tax policy with international standards, particularly the OECD's arm's length principle.

• Target: Specifically focuses on cross-border arrangements involving associated entities with substantial control.

• Exclusions: Exempts smaller entities from burdensome requirements, in line with EU regulations.

• Certainty Mechanisms: Offers unilateral transfer pricing rulings and advance pricing agreements, both valid for five years and renewable, to promote predictability and stability in financial planning.

These steps by both countries enhance their commitment to fairness, transparency, and compliance in multinational transactions, further aligning their practices with global OECD standards.