Tax “ruling” in Switzerland

A tax “ruling” in Switzerland is an advance ruling in tax matters, which allows taxpayers to clarify their tax situation by obtaining advance confirmation from the tax authorities on the interpretation of tax law in a given situation.

The taxpayer submits a ruling request to the tax administration detailing the facts and circumstances of his tax situation. The tax administration then analyzes the request and provides a written response confirming the position of the tax administration on the question raised.

The ruling can be binding or non-binding. In the case of a binding ruling, the tax administration undertakes to respect the position confirmed in the ruling, provided that the facts and circumstances of the tax situation do not change. In the case of a non-binding ruling, the tax administration simply provides its interpretation of the tax law, but is not bound by this interpretation.

The use of tax rulings is common in Switzerland, in particular for large multinational companies seeking to obtain advance confirmations from the tax authorities on the tax consequences of their operations. However, the use of these tax rulings is increasingly scrutinized by governments and international organizations, which consider that this can be considered an abusive tax practice and harmful to tax fairness.