Transfer pricing

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Transfer pricing refers to the rules and methods used in order to determine the prices and other conditions applied to cross-border transactions between enterprises that are legally independent but belong to the same group. Transfer prices must comply with the arm's length principle, according to which transactions between these enterprises should be conducted on the same terms as would be agreed upon between independent enterprises.

What is the arm's length principle?

The arm's length principle is used to calculate transfer prices for tax purposes between enterprises belonging to the same group. According to this principle, transactions of all kinds between these enterprises must be conducted on the same terms as would be agreed upon between unaffiliated third parties in the open market and under comparable circumstances.

What regulations apply to transfer pricing in Switzerland?

The Swiss legislator has not enacted any specific legislation on transfer pricing. However, the arm's length principle is applied on the basis of various provisions in tax legislation.

The arm's length principle is detailed in the OECD's Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD Transfer Pricing Guidelines). Although their content is not binding, the Swiss tax authorities and courts refer to the Guidelines, and use them as a source for interpreting the arm's length principle. 

Questions and answers on selected transfer pricing topics

Here you will find information on various transfer pricing topics in connection with cross-border transactions. This information is intended to provide clarification on selected issues. It is general in nature and cannot be used as the sole basis for the tax assessment of a specific fact pattern.

Cost plus method

Withholding tax in connection with primary, corresponding and secondary adjustments

Tax implications for Swiss taxpayers of Altera vs. Commissioner decision of the US Tax Court of 7 June 2019

Intra-group loans



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Federal Tax Administration FTA
Team Transfer Pricing
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