Transcript George Lutz - IFA-UK

IFA bilateral UK/Swiss meeting
Swiss treaty anti abuse provisionals CFC
May 10 / 11, 2012
Dr. Georg Lutz
Attonary at law, Swiss certified tax expert
Lecturer at University of St. Gallen
Partner at Ernst & Young
Historic overview of Swiss anti-abuse rules
►
1951
1962
1966
1966
1971
1976
1978
1996
1988
2003
2008
►
2010
►
►
►
►
►
►
►
►
►
►
Page 2
Art. VI Abs. 2 DTT-US 51
BRB 62 and circular letter 62
Art. 14 DTT-F
Art. 9 Abs. 2 lit. a (i) DTT-NL
Art. 23 DTT-D
Art. 23 DTT-I
Art. 22 DTT-B
Art. 22 DTT-US 96
Circular letter 1999
New Art. 23 DTT-D
Art. 3 DTT-UK, conduit arrangement, subsequently used in
a number of new treaties
Circular letter 2010
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz
Anti-abuse rules
►
arranged- and maintained rules
►
prohibitive tests





►
ownership test
forced dividend distribution
base erosion test
subject to tax clause
exclusion of entities / tax regimes
holding period
Page 3
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz
Anti-abuse rules
►
concept of beneficial ownership
►
bona fide clauses / safe harbour rules




Page 4
activity test
stock exchange test
holding test
derivative benefit test
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz
BRB 62 / CL 62 and CL 99
activity test
no
stock exchange test
yes
no
pure holding test
yes
no
mixed holding test
no
yes
Swiss owned and controlled
yes
no
minimum dividend payment
Art. 47 Abs 1 lit. b VStG
yes
yes
base erosion test
respected
yes
no
no treaty abuse, treaty protected
Page 5
no
treaty abuse, no treaty protection
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz
Art. 22 DTT USA 96
- Limitation on benefits
corporation
ownership test
no
stock exchange test
no
yes
activity test
yes
no
holding test
yes
no
limited derivative benefit test
yes
no
treaty protection based on
judgement
yes
yes
no treaty abuse, treaty protected
Page 6
IFA bilateral UK/Swiss meeting
no
treaty abuse, no treaty protection
Dr. Georg Lutz
Legal basis of anti abuse rules
unilateral rules
bilateral rules
multilateral rules
• BRB 62
• Art. 23 DTT-D
• Art. 15 sec. 1 and 2
Swiss-EU saving
directive
• §50d sec. 3 EStG
• Art. 23 DTT-I
• Art. 23 DTT-B
• Art. 23 DTT-US 96
• Art. 3 sec. 1 letter l
DTT-UK
• etc.
Page 7
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz
Overview of Swiss treaty anti-abuse provisions
maintained or arranged
rules
prohibitive tests
bonafine/safe harbour
rules
treaty override
provisions
DTT CH-NL
(Art. 9 § 2 lit. a (i))
DTT CH-USA
(Art. 22)
DTT -US 96
(Art. 22)
Swisss EU saving
directives (Art. 15 § 1)
DTT CH-GB
(Art. 3 § 1 lit. l)
DTT CH-GB
(Art. 3 § 1 lit. l)
BRB 62 / CL 1962 /
CL 1999
DTT CH-D
(Art. 23 § 1)
DTT CH-F
(Art. 14)
DTT CH-F
(Art. 14)
DTT CH-Chile
(Protocol to Art. 10-12)
DTT CH-Chile
(Protocol to Art. 10-12)
DTT CH-Mexiko
(Protocol to Art. 10-12)
DTT CH-Mexiko
(Protocol to Art. 10-12)
DTT CH-A
(Art. 28 § 7)
DTT CH-B
(Art. 22)
DTT CH-I
(Art. 23)
BRB 62 / CL 1962 /
CL 1999
Page 8
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz
Swiss CFC rules
►
Switzerland has no codified CFC rules similar to United States, United
Kingdom, Germany, France etc.
►
Switzerland has no limitation of the dividend received exemption for
dividends derived from passive or low taxed subsidiaries
►
Switzerland however does qualify Siwss controlled passive offshore
Companies as Swiss tax resident if actual management and control is
executed in Switzerland
Page 9
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz
Thank you for your attention
Page 10
IFA bilateral UK/Swiss meeting
Dr. Georg Lutz