What is a tax ruling?
A tax ruling is a written confirmation from the tax authorities regarding the application of the law in a particular situation. It is often used for complex transactions, corporate restructurings or situations where the application of tax laws is unclear. The main objective is to guarantee legal certainty for the taxpayer.
Identify the situation requiring a ruling
Before requesting a ruling, it is essential to analyze the situation that requires it.
These may include :
- Corporate restructuring (merger, demerger, transfer of headquarters).
- An international transaction involving several tax jurisdictions.
- A complex asset situation for an individual.
How do I apply for a tax ruling in Switzerland?
The first step in applying for a tax ruling is to draft a detailed application, including precise information on the situation or transaction envisaged. It should include a presentation of the parties involved, an exhaustive description of the facts, and a legal and tax analysis based on the law.
The request must also specify the requested tax treatment and conclude with a summary of the main points. If the request is submitted by a representative, it is imperative to include a power of attorney and a choice of domicile.
Models provided by the tax authorities
To facilitate drafting and ensure compliance with the request, the Direction des affaires fiscales (DAF) provides templates for tax ruling requests unrelated to real estate transactions and tax ruling requests related to real estate transactions.
These templates help to structure the request efficiently, and ensure that no essential elements are omitted.
Compliance with ruling commitments
Once the tax ruling is issued, the taxpayer must strictly adhere to the factual and legal conditions outlined in the request. Any discrepancy from the facts presented could invalidate the ruling. In case of non-compliance, the tax administration may reconsider its initial commitment. The ruling represents an agreement based on the principle of good faith, but it cannot be challenged, as it does not constitute a formal decision that opens avenues for appeal.
Tax ruling analysis and decision
After the submission of a tax ruling request, the tax administration conducts a thorough analysis. If the request is incomplete or does not comply with the formal and substantive requirements, it is deemed inadmissible, and the taxpayer is invited to submit a revised application. If the request meets the requirements but additional information is needed, a tax advisor will contact the applicant.
The final decision, validated by one or more tax advisors, may approve or reject the proposed tax treatment. The issued ruling may include specific factual conditions that must be met to remain valid. If approved, the tax advisors sign a document marked as approved as agreed.
