November 2017

8th Geneva Regional and Global Headquarters ConferenceSwitzerland in a global setting – securing the benefits while managing the costs

PwC

8.00-8.30 Registration, coffee and networking

8.30-8.50 Welcome and introduction

8.50-9.30 Forecasting the impact of a headquarter move on your employees

9.30-10.15 Switzerland in the heart of Europe

10.15-10.30 Overview of break-out sessions

10.30-11.00 Networking break

11.00-12.00 Break-out sessions, round 1

Topic 1: Income tax accounting – dealing with uncertainty and transparency

Topic 2: Being innovative in managing costs

Topic 3: Swiss tax in the international environment: audits, information exchange, transparency and reform

Programme

2November 2017

PwC

12.00-1.45 Lunch and networking

1.45-2.30 The European Union – inside the machines

2.30-3.15 US tax reform latest updates

Live video cast from Washington D.C.

3.15-3.45 Networking break

3.45-4.45 Break-out sessions, round 2

4.45-5.30 Panel discussion: perspectives on the future of Switzerland in a global setting

5.30 Conclusions, followed by an aperitif

Programme con’t

3November 2017

PwC

Sebastian di Paola, Partner, PwC Switzerland

4November 2017

Welcome and introduction

PwC

PwC Events and Community Switzerland

5November 2017

PwC

Download the app

• Go to www.pwc.ch/event-app or search 'PwC Events CH' in the App Store or Google Play.

• Blackberry users click on the HTML5 logo at www.pwc.ch/event-app.

and login with your email and your personal password

Information can be found on your lanyard card.

For any assistance please go to Christine Pelletier

6November 2017

PwC

We want your opinion Enter questions directly in the app

7November 2017

Click on the icon (top right) in the Activity Feed

PwC

Who is Carl Bellingham?

• A Partner at PwC• Don’t you mean Clive Bellingham?• Who cares?

Polling Question:

November 20178

PwC

Who is Carl Bellingham?

• A Partner at PwC• Don’t you mean Clive Bellingham?• Who cares?

Polling Question:

November 20179

PwC 10November 2017

Forecasting the impact of a headquarter move on your employees

Jose Marques, Partner, PwC SwitzerlandLinda Vos, Manager, PwC Switzerland

PwC

Content

1. Introduction: HQ Moves & HR in a changing world

2. A data driven HR approach

3. Two use cases around talent management

• Employee engagement (conjoint)

• Strategic Workforce planning

4. Wrap up and discussion

11November 2017

PwC

1. Introduction: HQ Moves & HR in a changing world

HQ Move

• Operating Model and functions: what , who, where and how

• HR, Relocation and Tax Policies

• Systems and processes

• Short, Medium and Long term resourcing needs

• Compensation structure

• Mobility strategy

• Employees’ personal case for relocation

• …..

Focus: Relocate, retain and recruit the resources needed under new HQ model

November 201712

PwC

1. CEO’s worry about their future Workforce PwC’s CEO survey 2017 & Millennials Study

Some key findings

13November 2017

PwC

1. CEO’s worry about their future Workforce PwC survey: The way we work – in 2025 and beyond

Some key findings

14

Future of work and digitisationDigitisation and automation will make 20 to 30% of jobs obsolete over the next 5 to 10 years, but only 16% of companies feel they are readyfor that change. Demographic shifts will have a tremendous impact on the composition of the workforce and working practices.

Talent managementMajor trends seen in the market are increased flexibility at work, the ability to design your own job, open and ongoing feedback plusdiverse career models. 49% of our survey participants think that employees will be working for more than one employer at a time in the future.HR’s challenge will be to efficiently manage this diverse career landscape.

Compensation and benefitsLifestyle incentives such as working from home and flexible working hours will become important, plus a shift from individual to teamand company performance bonuses. 50% of our financial sector respondents say bonuses will become less important in their industry.

MobilityGlobal mobility will grow in importance, particularly for large firms. Assignments will move to short-term projects of up to 3 months or ayear. There will be more cross-border commuters, living and working in different countries. We’realso seeing the rapid emergence of employee mobility between different companies, as organisations start to exchange talent on atemporary basis.

HR organisationHR will become fully digital – not only in terms of applications and technology, but also in the way big data is used to understand theworkforce, equip employees with digital skills and to develop new business models. HR departments will work with other companiesas part of a network, for instance for hiring and sharing talent. 81% say HR will follow the trend of becoming a centre of excellence, withtransactional work outsourced or processed offshore.

Culture and changeDigitisation is seen as the most important driver for cultural change. Agility and the ability for employees to embrace change aretherefore vital. Developing a strong and compelling company culture will become a differentiator and distinctive factor in engagingand retaining employees, particularly for companies sharing employees in their networks.

November 2017

PwC

2. A data driven HR approach

15November 2017

PwC

2. A data driven HR approach Who should care?

Finance Directors

CEO / Board HR

Directors /

Managers

BU leaders

• Are responsible for making sure that all parts of the business understands the company's financial performance and their roles in controlling budgets and meeting targets.

• What people cost, and what they all do, are fundamental to the FD's role.

• Are responsible for driving strategy and making sure this happens at every level.

• will decide on business strategy and will want to be sure the organisation’s management and workforce are fully behind this

• Are responsible for the overall strategic direction and management of the most important asset any company has: its people.

16November 2017

PwC

2. Increase the maturity of your workforce insightSteps to take

Global Mobility dashboard

Strategic Workforce Planning

Conjoint Analysis

17November 2017

PwC

2. Increase the maturity of your workforce insightGlobal Mobility dashboard

Go to demo

18November 2017

PwC

3.1 Talent Management and Employee EngagementConjoint analysis

“What do our employees really want from their rewards? Can we offer them while making sure they are still in line with our Business Strategy?”“Can we reduce costs

without hurting employee satisfaction, engagement and retention?”

“How should we rebalance our resources to ensure we are spending our rewards budget efficiently?”

Do not only focus on associated costs but focus also on the value that your employees actually attach to the different components

19November 2017

PwC

3.1 Talent Management and Employee EngagementChallenge: how to predict impact on employees of moving HQ? And how to keep them happy after the move?

CostsBenefits

Consider it Jointly

How to spend your HR employee benefit budget? How to create highest value for your employees?

20

• Fixed versus flexible benefit systems

November 2017

PwC

Conjoint survey:

• A survey in which every employee makes several choices

• Always between a limited amount of different employee benefits packages.

• The value attached to the separate items differs between predefined ranges. Also budget restrictions are in place

• Tool: Using self-learning Machine Learning algorithms every next choice depends on previous choices

3.1 Conjoint analysisHow does it work? (1/2)

21

Package A

• Travel time: 30 min

• Salary: CHF 7,500

• Home office: no

• Days off: 25

• Team: 1 location

• Travel time: 60 min

• Salary: CHF 7,500

• Home office: yes

• Days off: 27

• Team: 1 location

• Travel time: 60 min

• Salary: CHF 8,000

• Home office: no

• Days off: 27

• Team: 1 location

Package B Package C

November 2017

PwC

3.1 Conjoint analysisHow does it work? (2/2)

• Make sure to be clear around goal. Do not give unrealistic expectations

• Make sure you find the right level of granularity, e.g. regarding

• Tailoring values to different function levels (3)Max 3

• Number of values of features (e.g. days off: 3 - 25,30,35)Max 3

• Number of features to analyse (5)Max 5

• Number of repetitive choices (5)Between 10-20

• Employee engagement in general will increase (both in short and long term)

22November 2017

PwC

3.1 Conjoint analysisSteps to take

1. Technical set-up of survey2. Performing pilot3. Develop final survey4. The survey will be send to all

employees

The data is transformed and statistical techniques are applied.

The outcomes are analyzed and reviewed. Note that results can be analyzed per sub group.

What would be the expected impact on my employees?

Discuss impact withinorganisation (board / HR / finance)

3. Survey 4. Data preparation

4. Analysis5. Package of

employee benefits

1. Research question

2. Survey design

• Choose features of interest• Choose reasonable boundaries on value setting• Choose level of granularity

23November 2017

PwC

3.1 Conjoint analysisLet’s do a game

Play

24November 2017

PwC

3.2 Strategic Workforce Planning

“Our rapidly changing society combined with the impact of technology (e.g. robotics) on our daily business, I expect a major change in skills and competences that my employees need in 3-5 years from now. Should we invest in retraining our current employees or is it better to focus fully on attracting new talents having these skills already?

“Due to ageing a lot of my employees will retire in the upcoming five years. What is impact of this on recruitment strategy? When should we start hiring new people? How do we prevent loss of business knowledge?

“Due to a high level of seniority in my workforce the salary costs are too high compared to revenues generated by those people. What would be the effect of demotion?”

25November 2017

PwC

3.2 Strategic Workforce Planning

26

Strategic targets

Formation target

Staffing policy

Implementation

Scenario analysis

November 2017

PwC

3.2 Strategic Workforce Planning

• Get insight in and define the desired workforce

• In base case we define 3 main goals to optimize: FTE, function ratios, and costs.

• Weighted optimization is possible

• Analyse how workforce evolved in the past

• Markov modelling is cornerstone of the model

• Determine the expected future workforce ‘laissez faire’

• Perform GAP analyses and determine possible interventions

27

Potential interventions

• Change staff evaluation framework

• Change pension plan

• Change flexible layer of workforce

• Change contracts

• Retention Policy

• Adjust promotion policy

• Reorganisation

• M&A

• Outsource part of the business

• Change recruitment policy

• Retraining

November 2017

PwC 28

3.2 Strategic Workforce PlanningThe Dutch National Police

Ted Vollebregt (Leader SWP at the Dutch National Police)

“a good model that clarifies future workforce flows is obviously a prerequisite for strategic forecasts of staffing, but the associated explanation is just as important.”

“Using this tool, we can calculate scenarios and clarify the effects (in FTEs and costs) of the various policy alternatives and interventions, meaning that the final decisions can be taken based on facts and figures rather than just on intuition.”

November 2017

PwC

4. Wrap up and discussion

Some take-aways

29

Pace of change Scenario planning; being reactive costs money and puts the business at risk

Digitalisation Cloud, robotisation, data analytics are a threat and an opportunity

Old jobs/new Jobs Recruit and develop the new jobs you will need in 5 years time

Innovation/agility/ What competencies will you needChange

Key talent Diversity , flexibility, openness and networking

Purpose & Culture Differentiation

November 2017

PwC

Ambassador Henri Gétaz, Head of the Directorate for European Affairs (DEA) within the Federal Department of Foreign Affairs (FDFA)

30November 2017

Switzerland in the heart of Europe

Ambassador Henri GétazHead of the Directorate for European Affairs DEA

Switzerland at the heart of Europe8th Geneva Regional Headquarters Conference

1 November 2017

Federal Department of Foreign Affairs FDFA

Directorate for European Affairs DEA

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

Switzerland as a competitive global player

• Switzerland tops the WEF Global Competitiveness Index (for the 8th consecutive year) and ranks 2nd in the IMD World Competitiveness Ranking 2017

• Framework conditions: Effective and transparent public institutions

• High quality in education and research; high patenting rate

• Labour market: balance between employee protection and the interests ofemployers

• Excellent infrastructure; central location in Europe

• Acces to financial/tax: easy access to finance, favourable tax environment

• Market access: reliable framework of agreements with EU and beyond

32

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

UE-28

EEE

Candidats à l’adhésion

33

• Most important political and economic partner

• Geographical proximity: at the heart of Europe

• Cultural proximity

• Switzerland = linchpin of theNorth-South communication andtransportation axis

• Solidarity: Enlargement contribution

• Close cooperation

Switzerland–EU: A close partnership

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

Intense relations CH–EU

Sources: Swiss-Impex, Eurostat

34

CHF 124bn(72% of CH imports)

CHF 113bn(54% of CH exports)

Trade 2016

EUR 829bn

EUR 627bn

Direct investment 2015

EUR 116bn

EUR 69bn

Services 2015

68.4%

31.6%

EU-28/EFTA: 1,390,405Other states: 639,122

Total population 8,419,550 Foreign nationals 2,029,527Cross border commuters 313,281

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

CH–EU relations: bilateral sectorial agreements

• Areas covered by the bilateral agreements:

→ Trade in goods

→ Free movement of persons

→ Fiscal cooperation

→ Security/Migration

→ Numerous sectorial cooperations

35

Switzerland’s high competitiveness andbilateral relations with the EU are closelyrelated and mutually influence each other

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

Current state and challenges

• Stable and regulated relations are essential

• CH–EU relations suffer from two fragilities:

→ Swiss internal debate concerning the free movement of persons

→ Necessity of a CH–EU consensus regarding fundamental institutional issues

• Brexit

36

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

Consolidating free movement of persons

• Mass migration initiative (Feb. 2014): overcome … for the time being

• Controversial debate ahead (other popular initiatives)

• Continued high migration flows to be expected – need for sound policy responses

→ baby boom generation leaving labor market -> continued immigration

→ Infrastructure to be secured (education, housing, transport)→ Transformation of labour market with digitalisation

37

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

Swiss–EU institutional framework

• Bilateral agreements CH-EU: from a transitory to a permanent solution

• Need to ensure balance between market access and sovereignty

• Controversial domestic debate

→ Stake is high: Switzerland as a regionally integrated global player vs. focus on

domestic market/offshore economy

38

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

Brexit: «Mind the gap»

Relations CH-UK are based on the agreements with the EU:• Free Trade Agreement ‘72 & Bilaterals I + II• After Brexit: agreements with the EU no longer apply to UK• Risk of legal uncertainty and gaps in market access

Strategic objective of Switzerland and UK:• Preserve rights and obligations based on CH-EU agreements also after Brexit• Extend relations in areas of common interest (e.g. foreign relations, economic policy)

39

Switzerland at the heart of Europe, November 2017© Directorate for European Affairs DEA

Thank you for your attention

40

PwC

Overview of break-out sessions

41November 2017

PwC

Break-out Topic 1: Income tax accounting – dealing with uncertainty and transparency(Guillaume Nayet, Partner and Gil Walser, Director)

Break-out Topic 2: Being innovative in managing costs

(Darioush Zirakzadeh, Director)

Break-out Topic 3: Swiss tax in the international environment: audits, information exchange, transparency and reform

(Monica Cohen-Dumani, Partner, Patricia More, Partner, Thibaut de Haller, Director)

Overview of break-out sessions

42November 2017

PwC

US - Inside US Tax policy

43November 2017

PwC

Networking break

44November 2017

PwC

Income tax accounting – dealing with uncertainty and transparency

Break-out session, round 1, topic 1

45November 2017

Virginie Jordan Duvoisin, International Tax and Transfer Pricing Director, Richemont International SAGuillaume Nayet, Partner, PwC SwitzerlandGil Walser, Director, PwC Switzerland

PwC

Changing tax landscape

Swiss-EU Automatic Exchangeof Information (AEOI)

Anti Avoidance Rules

Spontaneous Exchange of Tax Rulings

Swiss Tax Proposal 17

Diverted Profits Tax

Anti Tax Avoidance Directive

Publication of Tax Strategy

Interest deductions

Licence capping rule

Treaty abuse

Permanent Establishments

US Tax Reform

Country by Country Reporting

BEPS

46November 2017

PwC

Why managing uncertainty and transparency is important

“Tax is an important input for our valuation of a company. The models use after-tax cash flows so we need to know whether there is a significant risk of challenge by the tax authorities so we don’t get surprised.”

“Tax disclosures can influence our perception of a company. We differentiate between those that disclose and those that don’t. We also wonder about those that seem to have aggressive tax policies – it may indicate that they are aggressive in other areas too.”

“The most important and comprehensive source of tax information is the annual report. If a company puts its tax strategy somewhere else (e.g. on its website), it should at least cross-refer to those other sources.”

“Tax can be an area we screen for when deciding whether to make an investment. If a company is silent, we will draw our own conclusions and may decide not to invest or to sell. More transparency can help us make better decisions.”

PwC Investor View: What do investors want to see in company tax disclosures? See link

47November 2017

PwC

Dealing with uncertainty and its impact on your tax provision

“Certainty? In this world nothing is certain but death and taxes.”(Benjamin Franklin)

48November 2017

PwC

Sources of uncertainty

And many more …!

Tax Status Taxable?Deductible?

Unclear/unco-ordinated tax laws and rules

Transfer pricing Permanent Establishments

49November 2017

PwC

Issues addressed by relevant accounting Standards (e.g. FIN 48 and IFRIC 23)

When to recognise? Detection risk?

Changes in circumstances

CHANGE

SAME

Unit of account?

How to measure?

50November 2017

PwC

Decision on disclosure

Transparency to whom and for what purpose?

Transparency to whom and for what purpose?

Stakeholder Why interested? What data? Disclose? Risk? Benefits?

Voluntarydisclosure

Risks and benefitsof (not) disclosing?

Mandatorydisclosures

What are the risks and benefitsof your mandatory disclosures?

Could voluntary disclosures reducerisk or provide benefits?

Draft disclosures

Optimised disclosures

Would voluntary disclosure address a stakeholder interest?

Who is interested in your mandatory

disclosures? Why?

• Are the disclosures understandable to the interested parties?• Do the disclosures maximise benefit to the company and respond to the needs of stakeholders? • How do the tax disclosures fit with broader messages on contribution and impact?

Do you have the systems and processesto support your disclosures?

51

November 2017

PwC

Transparency is key!

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in thispublication, and, to the extent permitted by law, PricewaterhouseCoopers AG, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, inreliance on the information contained in this publication or for any decision based on it.

© 2017 PwC. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers AG which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Thank you

52November 2017

PwC

Being innovative in managing costs

Break-out session, round 1, topic 2

53November 2017

Robert Gachot, CFO, O-I EuropeFrederik Hedlund, CFO, The Nielsen Company (Europe)Wieland Noetzold, Head of Corporate Planning, Sunstar Suisse Darioush Zirakzadeh, Director, PwC Switzerland

PwC

3 categories of initiatives to consider

Business Model Review (Performance & compliance)

These initiatives could have the following

impacts:- Efficiency increase- Workforce savings- Changes in Roles &

Responsibilities- Substance changes- Tax (TP, ITX, CT)

- Service Level Agreements

1

Process, Organisationor systems optimization

(Robotics, Process Automation)

2

Offshoring(Shared Service Centers &

Outsourcing)3

54November 2017

PwC

Swiss tax in the international environmentAudits, information exchange, transparency and reform

Break-out session, round 1, topic 3

55November 2017

Christine Benzakein, Vice President Tax, Ralph Lauren EuropeMonica Cohen-Dumani, Partner, PwC SwitzerlandPatricia More, Partner, PwC SwitzerlandThibaut de Haller, Director, PwC Switzerland

PwC

1. Overview of the landscape

November 201756

PwC

A changing global tax environment with significant business impacts

Increasing Global

Controversy

OECD BEPS

Brexit Unilateral Actions

Increasing Information Reporting &

Transparency

EU GAARATAD I&II

US Tax Reform

State Aid

Increasing focus on

indirect taxes

November 201757

PwC

A Changing Global EnvironmentA quick overview of OECD BEPS

CoherenceAction 2: Hybrid Mismatch

Arrangements

Action 3: CFC Rules

Action 4: Interest Deductions

Action 5: Harmful Tax Practices

Substance

Action 6: Preventing Tax Treaty Abuse

Action 7: Avoidance of a PE Status

Action 8 - 10: Aligning Transfer Pricing with

value creation

TransparencyAction 11: Measuring and

monitoring BEPS

Action 12: Mandatory Disclosure

Action 13: TP Documentation

Action 14: Dispute Resolution

.Action 1: Digital economy

Action 15 : Multilateral Instrument

15 Actions – 13 Final ReportsNovember 2017

58

PwC

A Changing Global EnvironmentGlobal focus on base erosion and profit shifting

USDiscussion of international tax reform/innovation boxBEPS-inspired actions regarding –• CbC reporting on IRS

business plan• Treasury revises model

tax treaty

South KoreaBEPS-inspired actions regarding –• Tighten thin cap rules • Increased penalties for

tax fraud• VAT imposed on digital

services via foreignopen-market

China BEPS-inspired actions regarding –• GAAR applying to cross-border

arrangements• Artificial avoidance of PE status• Outbound payments to overseas

related parties

CanadaAdoption of OECD’s CbCR standard

EU• State aid investigations• BEPS-inspired legislation

enacted in multiple jurisdictions

• EU ATA Directive

Ireland• Knowledge box being

developed• Phase-out of ‘Double

Irish’ strategy

UK• Corporate rate cut to 17% by 2020• Diverted Profits Tax• Anti-hybrid legislation

MexicoBEPS-inspired actions regarding –• Certain related party payments• Claiming tax treaty benefits• New information returns• Limiting creation of PE for non-

residents.

BrazilBEPS-inspired actions regarding –• Transfer pricing rules• CFC rules. Australia

Diverted Profits Tax enacted

JapanBEPS-inspired actions regarding –dividend exemption rules

IndiaBEPS-inspired actions regarding –• strengthening anti-avoidance rules • increasing scrutiny of treaty structures• Permanent establishments

South Africa BEPS-inspired actions regarding –• Imposition of interest

capitalization rules• Disclosure of

reportable arrangements

Worldwide• MLI signed by 68 countries at

the signing ceremony• Most countries have adopted /

will adopt CbCR legislations

November 201759

PwC

Anti tax avoidance Directive (I+II)

• Interest deductibility• Exit tax• GAAR• CFC rules * • Hybrid mismatches *

Recommendations to EU member states on how to reinforce their tax treaties in an EU -law compliant manner

External strategy for effective

working with

governance

Anti tax avoidance Directive II

CCTB/CCCTBPublished on

October 26, 2016

State aidOngoing EU

Commission state aid investigation,

e.g. Apple, Starbucks, Fiat.

DAC 6Mandatory disclosure of

tax information (proposal)

DAC 1 mandatory automatic

exchange of non financial information

DAC 2: automatic exchange of

financial account information (2014)

DAC 4CbCR(2016)

DAC 5AML

(proposal)

DAC 3automatic exchange of cross-

border tax rulings (2015)

A Changing Global EnvironmentSome EU measures on base erosion and profit shifting

60

Directive for Administrative Collaboration

(DAC) *

* To be considered for Switzerland November 2017

PwC

A Changing Global EnvironmentIncreasing collection of data by tax authorities

SAF-T based on OECD’s format (full or partial content)

Other e-files or additional reporting (some of SAF-T content covered - usually GL or billing, but not same data aggregation/ specific formats)

Discussion about implementing SAF-T/e-files

No e-file /no information

Last updates:- Control statement in Italy since Q1 2017- New real-time VAT reporting regime in Spain since July 2017- Amended SAF-T structure in Portugal since July 2017

Coming up soon:- New excise duty documentation in Lithuania effective 1 November 2017- New SAF-T VAT structure Poland effective 1 January 2018- Implementation of SAF-T in Norway postponed to 1st January 2018- New real time reporting in Hungary postponed to July 2018

DENMARK

LUXEMBOURG

PORTUGAL

SPAIN

FRANCE

ITALY

FRANCE

IRELAND

UNITEDKINGDOM

NETHERLANDS

BELGIUM

GERMANY

SWITZERLAND

AUSTRIA

CZECHREPUBLIC

POLAND

SLOVAKIA

NORWAY

SWEDEN

FINLAND

ESTONIA

LATVIA

LITHUANIA

SLOVENIA

HUNGARY

ROMANIA

BULGARIA

GREECE

ANDORRA

LIECHTENSTEIN

MONACOITALY

Edinburgh

Stavanger

Goteborg

Krakow

GdanskHamburg

Bremen

Leipzig

Leeds

Porto

Gibraltar

Sevilla ValenciaBarcelona

Palermo

Cagliari

Naples

Bordeaux Lyon

Marseille

Venice

Geneva

Genoa

StrasbourgMunich

Belfast

Amsterdam

Copenhagen

Stockholm

Ljubljana

Athens

AndorraLa Vella

VaduzBratislava

Budapest

Madrid

Bern Vienna

Berlin

PragueLuxembourg

London

Brussels

Vilnius

Tallinn

SofiaRome

Bucharest

Paris

Lisbon

Dublin

Warsaw

Riga

HelsinkiOslo

Öland

Gotland

Bornholm

BALEARICISLANDS

Corsica

Sarinia

Sicily

Crete

IrishSea

TyrrhenianSea

IonianSea

LigurianSea

Cyprus

MALTAOutside EU:- Real time reporting in Brazil- Implementation of GST in India- Implementation of VAT in the GCC countries

61

Many data are already collected and available for the tax authorities. Who will be able to use them first? Businesses or tax authorities?

November 2017

PwC

A Changing Global EnvironmentNews VAT practices in the EU

Mechanisms for the Effective Collection of VAT/GST

• On 24 October, OECD released a report which focuses on the rulesand mechanisms for the effective collection of VAT/GST on cross-border supplies of services and intangibles in cases where the supplieris not located in the jurisdiction of taxation.

• Willingness to ensure that VAT/GST is properly paid on thecontinuously growing online trade in services and digital products.

62

Increasing collaboration between tax authorities

• Communication from the Commission to the European Parliament ,the Council and the European Economic and Social Committee on thefollow-up to the Action Plan on VAT.

• The Commission has launched the development of the TransactionNetwork Analysis for the exchange and joint processing of targetedVAT data by risk analysis officials of the Eurofisc network.

• This new instrument will allow tax administrations to stop fraudulentnetworks in a simpler, quicker and more secured way.

November 2017

PwC

A Changing Global EnvironmentNews VAT practices in the EU

Proposal for a Definitive EU VAT system

2 main reasons :

• €50 billion VAT loss each year is estimated to be due to cross-border VAT fraud.

• Many companies consider that the complexity, additional compliance costs and legal uncertainty of the VAT system often prevent them from engaging in cross-border activities and reaping the benefits of the single market.

Two steps approach

01

• Published on 4 October 2017

• Entry into force as of 1st January 2019

• Four areas targeted :

Valid VAT number Chain transactions Call-off stock Proof of intra-Community supply

• Expected during 2018

• Entry into force in 2022

• Main targets :

New “intra-Union supply” Abolition of EU supplies and acquisitions Dependency of Certified Taxable Person One-Stop Shop

01

“Quick wins” measures Definitive EU VAT system

63

02

November 2017

PwC

2. Switzerland in the changing landscape

November 201764

PwC

Abolition of tax regimes (holding, mixed, domiciliary, principal and finance branch regimes)

Overview of the TP 17 measures

Tax Proposal 17

Mandatory cantonal Patent Boxaccording to OECD-standard

Increase of partial taxation of private dividend income

Federation: 70%

Cantons min. 70%

Increase of cantonal share indirect federal tax revenues

from 17% to 20.5%

Basis: Legal certainty & investment security

Optional cantonal R&D super-deduction (max. 50%)

Increase of children and educationallowances

by CHF 30

Maximum limitation of reliefs of max. 70%

Separate taxation of formerly tax free hidden reserves (during 5 year transition period)

Current cantonal step-up practice and tax effective depreciation of hidden reserves (max. 10 years; DTA)

Adaption of cantonal capital tax basefor parti-cipationsand patents

Cantonal rate reductions

No longer included:

NID

Abolition of issuance stamp tax

Deferred:

53

November 2017

PwC

Other measures planned by Switzerland?BEPS and other action items

BEPS Action items Comments

BEPS Action item 3 (CFC)

• No CFC rules at this stage and no plans to introduce CFC regime

BEPS Action item 4(interest deductions)

• Current Swiss thin cap rules are seen as being sufficient to counter unreasonable interest deductions. No plans to introduce further limitations (e.g. fixed / group ratio rules)

BEPS Action item 5 (harmful tax practices)

• Current harmful tax practices (Federal / cantonal tax regimes) will be abolished with TP17(cf. previous slide)

• Legislative framework for spontaneous exchange of tax rulings from FY 2018 implemented

BEPS Action item 6 (prevent treaty abuse)

• PPT or LOB clauses are included in current Swiss double tax treaties• Multilateral instrument (MLI): Switzerland will adopt PPT option

BEPS Action item 13 (CbCR)

• Switzerland signed multilateral competent authority agreement for automatic exchange of CbC reports (from FY 2020)

BEPS Action item 14 (dispute resolution)

• Various Swiss double tax treaties already include arbitration provisions• MLI: Switzerland will adopt mandatory arbitration provision

Other • Increased criminal liabilities (in particular for company officers) in case of aggressive tax planning -> art. 6 of the Administrative Criminal Law Act (loi sur le droit penal administratif– RS 303.0)

54November 2017

PwC

3. What to expect?

November 201767

PwC

A changing global tax environment with significant business impacts

OECD BEPS 2 ?

Tax planning Vs.

Business planning? Increased Global

Controversy

Global availability of tax-related information

Public availability of information?

Significant investment in IT

Increased use of black lists?

Impact on State’s autonomy

Global compliance and reporting costs increaseStandardization of

cross-border / cross-specialty

audits

Standardization of criminal

implications?

Improved dispute resolution

mechanism

Principal Purpose Test

November 201768

PwC

Lunch and networking

69November 2017

PwC

The European Union – inside the machines

EU Tax dynamics

70November 2017

Stef van Weeghel, Global Tax Policy Leader, PwC NetherlandsMonica Cohen-Dumani, Parnter, PwC Switzerland

PwC

Agenda

1. The role of the EU institutions

2. EU BEPS

3. Activism in the European Parliament

4. State aid

5. The role of NGOs

6. Transparency overview

7. Political and economic developments and impact on EU Tax agenda

8. Appendix- CC (C )TB

71November 2017

PwC

● EU-level decision-making on TAX always starts with Commission proposal, which is then sent toCouncil (EU-28 Member States) for adoption, after consultation of the EU Parliament

● Commission: right of initiative EU tax legislative proposals, executes political agenda of its President, butseeks buy-in from Parliament & stakeholders; EU can go beyond BEPS

DG TAXUD: development & coordination of tax policy across EU, Control of application EU law

DG COMP: competition watchdog; EC fiscal State aid decisions, only subject to EU Court review

● Council (ECOFIN): adopts TAX legislation by unanimity, formally consults Parliament

NB: Member States have retained autonomy for Direct Taxation within the EU

● EU Parliament: only directly democratically elected EU body, only advisory role on TAX, but gainedinfluence; activist role: apply maximum political & media pressure on Member States and the Commission

Temp. committees on tax rulings (TAXE I + II) following LuxLeaks, and tax evasion, tax avoidance andmoney laundering (PANA) following Panama Papers

Political, no legal control function, non-binding recommendations for further EU legislative action onfairer taxation, more transparency, anti-tax avoidance

The role of EU institutions

72November 2017

PwC

EU BEPS

• Background to “EU BEPS”

- Turning point: “LuxLeaks” Nov. 2014

- Since then unprecedented EU action

- ATAD1 and ATAD2 sometimes go further than OECD

• What’s driving this?

- EU as global actor, first-mover, frontrunner

- “Leaks/scandals”, public opinion, media, NGOs

- OECD & EU competition

- EU politics & decision-making process

73November 2017

PwC

What’s on the EU’s tax agenda?

• Implementing BEPS in Europe

• Proposed EU directives:Public CBCR, Effective dispute resolution mechanism, recast of Interest & Royaltydirective, CCTB and CCCTB, Disincentives for advisors, promoters and enablers of aggressive tax planning schemesresulting in tax avoidance or evasion

• EU & rest of world: EU blacklist non-EU non-cooperative tax jurisdictions

• Code of Conduct Group (business tax): stop harmful tax practices

74November 2017

PwC

State aid investigations

75November 2017

PwC

Political Activism of the EP

• TAXE I“Stresses that tax avoidance by some MNCs can result in close-to-zero effective tax rates for the profits generated in European jurisdictions, highlighting the fact that such MNCs, while benefiting from various public goods and services where they operate, do not pay their fair share”

• TAXE II“Regrets that many multinational enterprises heard have not strongly condemned tax avoidance practices and aggressive tax planning”

• Panama Papers Inquiry Committee

"Anyone who thinks globalisation is a good thing must be willing to address its darker sides, of which tax secrecy is one,” Joseph Stiglitz

76November 2017

PwC

The role of NGOs

• Oxfam Novib report May 2016: ‘Developing countries miss 100 billion of revenue’

• Tax Justice Nederland:

‘30.000 signatures for fairer taxation’

• Greens November 2016:

‘BASF avoids 923 million euro of taxes’

77November 2017

PwC

ActionAid, Christian Aid and Oxfam - Approaching tax responsibility beyond legal compliance

Tax responsibility as a process by ActionAid, Christian Aid and Oxfam:

Key principles Key issue areas

Transparency 1. Tax planning practices

2. Public transparency and reporting

3. Non-public disclosure

Assessment 4. Relationships with tax authorities

5. Tax function management and governance

6. Impact evaluation of tax policy and practice

Improvement 7. Tax lobbying/advocacy

8. Tax incentives

78November 2017

PwC

To a transparent tax world

• OECD Standard for AEOI• CBCR• EU exchange of x-border

rulings / APAs• FATCA• CRS

• Extractive industries transparency initiative

• Voluntary CbCR disclosures

• Cooperative compliance arrangements

• US Sec 1504 Dodd Frank • EU Accounting Directive• EU capital requirements

regulation and directive –CRR/CRD IV

• Public CbCR

• UK DOTAS• US FATCA• BEPS Action 11• BEPS Action 12• BEPS Action 13 Mandatory

disclosures to tax

administrations

Mandatory public

disclosures

Exchange of information between tax

administrations

Voluntary disclosures

beyond statutory

obligations

UBO register: public or for EoI only?

79November 2017

PwC

Political and economic developments and impact on EU Tax agenda

• Brexit

• Digital Economy

• US Tax Reform

80November 2017

PwC

Appendix: C(C)CTB

CCTB proposal

• Mandatory set of rules for a common tax base for companies (incl. EU PEs) belonging to a consolidated group for financial accounting purposes with a total consolidated group revenue >€750m + voluntary opt for the rest

• PE definition for EU PEs• Broadly designed tax base • Interest limitation rule • “Allowance for Growth and Investment” • Depreciation rules• Losses+temporary cross-border consolidation of

losses until the adoption of the CCCTB Directive• General and special anti-tax avoidance

provisions• Hybrid and tax residency mismatches• Implementation: 1 January 2019

CCCTB proposal

• Same scope as the CCTB proposal• Definition of the group: two-part test based

on control and ownership• Provisions on business reorganizations and

the taxation of losses and unrealized capital gains

• Provisions on withholding taxes• Formulary apportionment: three equally

weighted factors (i.e., labor, assets and sales by destination)

• Administrative procedures:groups will deal with a single tax administration (principal tax authority) in the EU (one-stop-shop)

• Implementation: 1 January 2021

81November 2017

PwC

Live video cast from Washington D.C.

US tax reform latest updates

82November 2017

Rohit Kumar, Principal and Leader WNTS Tax Policy Services, PwC USTom Quinn, Partner, PwC US

PwC

Presenter

Rohit Kumar, Partner, Tax Policy Services Practice Leader

Thomas F. Quinn, Partner, International Tax Services

Moderator

83November 2017

PwC

Polling Question 1

A. Tax

B. Finance

C. Operations

Which of the following best

represents your role

within your organization?

84November 2017

PwC

PwC

Polling Question 2

A. 2017

B. 2018

C. Later than 2018

When do you expect

Congress will pass US tax

reform?

86November 2017

PwC

PwC

Polling Question 3

A. Lowering the corporate rate to 20%

B. Changing from a worldwide to territorial system of tax

C. Accelerated cost recovery for capital investments

D. Reduction in taxes on individuals

What do you think would be the most significant

change to the US Tax Code?

88November 2017

PwC

PwC

Unified Republican tax reform goals

A tax system that is:• Simpler,• Creates more jobs and higher wages,• Cuts tax rates, and• Encourages companies to bring back jobs and profits that are offshore.

90November 2017

PwC

*

Tax reform: Possible timeline for success

FY18 budget resolution?*October

W&M / SFC “Chairman’s Marks?

Nov. / Dec.Tax committees vote on bills if no votes before Nov.

House & Senate vote on bills

Dec. / Early 2018House and Senate resolve differences and vote to pass a final bill. Legislation signed into law by President Trump**

Trump Administration US House of Representatives

Speaker Ryan

US Senate

Majority Leader McConnell

Treasury SecretaryMnuchin

Ways &MeansChairman Brady

FinanceChairman Hatch

NEC Director Cohn

91November 2017

PwC

Big Six tax reform unified frameworkBusiness

• 20% corporate tax rate

• 25% maximum passthrough rate for business income of small and family-owned businesses

• Full expensing of capital investments made after Sept. 27, 2017 for at least 5 years

• Partial limitation on net interest expense

• Repeal special deductions and credits, including Sec. 199 domestic manufacturing deduction; preserves research and low-income housing credits

• Create territorial international tax system with 100% foreign dividend exemption

• One-time mandatory deemed repatriation tax on previously untaxed foreign earnings (non-cash assets at lower rate than cash and cash equivalents)

• Rules to protect the US tax base – inbound – outbound

• What is unsaid is as important as what is said

92November 2017

PwC

Big Six tax reform unified framework (con’t.)Individual

• Tax rate brackets of 12%, 25%, and 35% (an additional top rate may apply)

• Standard deduction almost doubled to $24,000 joint/$12,000 single

• Eliminate most itemized deductions (retain tax incentives for home mortgage interest and charitable contributions)

• Retain tax benefits that encourage work, higher education, and retirement

• Repeal AMT and estate tax

93November 2017

PwC

Key Takeaways

What to look for in the days and weeks ahead• Reaction to statutory language released this week• Action by tax writers in House of Representatives the week of November 6th

• Action by tax writers in Senate the week of November 13th

• Action on House floor the week of November 13th

• Action on Senate floor early December

What does this mean for operations in Switzerland• US deferral removed as a consideration if a territorial regime adopted• Foreign minimum tax would reduce (but not eliminate) the incentive for

foreign to foreign base erosion • New inbound rules may change the economics of ex-US operations• Any carve out for active business income would incentivize operation in

jurisdictions with ability to provide space and workforce.

94November 2017

PwC

Deeper divePwC’s new Inside Tax Policy on-demand video podcasts

• Insights on tax policy changes as they unfold and on the go

• Direct access to PwC’s Washington DC National Tax Services team

• Special guest commentators, congressional leaders, and subject matter specialists content on a wide range of tax-related topics

• Weekly alerts on key regulatory and legislative changes

• For more information and to subscribe to our new podcasts, please visit our Inside Tax Policy page at: www.pwc.com/us/insidetaxpolicy

95November 2017

PwC

Networking break

96November 2017

PwC

Income tax accounting – dealing with uncertainty and transparency

Break-out session, round 2, topic 1

97November 2017

Massimo Di Cesare, Group Head of Tax, Richemont International SAGuillaume Nayet, Partner, PwC SwitzerlandGil Walser, Director, PwC Switzerland

PwC

Changing tax landscape

Swiss-EU Automatic Exchangeof Information (AEOI)

Anti Avoidance Rules

Spontaneous Exchange of Tax Rulings

Swiss Tax Proposal 17

Diverted Profits Tax

Anti Tax Avoidance Directive

Publication of Tax Strategy

Interest deductions

Licence capping rule

Treaty abuse

Permanent Establishments

US Tax Reform

Country by Country Reporting

BEPS

98November 2017

PwC

Why managing uncertainty and transparency is important

“Tax is an important input for our valuation of a company. The models use after-tax cash flows so we need to know whether there is a significant risk of challenge by the tax authorities so we don’t get surprised.”

“Tax disclosures can influence our perception of a company. We differentiate between those that disclose and those that don’t. We also wonder about those that seem to have aggressive tax policies – it may indicate that they are aggressive in other areas too.”

“The most important and comprehensive source of tax information is the annual report. If a company puts its tax strategy somewhere else (e.g. on its website), it should at least cross-refer to those other sources.”

“Tax can be an area we screen for when deciding whether to make an investment. If a company is silent, we will draw our own conclusions and may decide not to invest or to sell. More transparency can help us make better decisions.”

PwC Investor View: What do investors want to see in company tax disclosures? See link

99November 2017

PwC

Dealing with uncertainty and its impact on your tax provision

“Certainty? In this world nothing is certain but death and taxes.”(Benjamin Franklin)

100November 2017

PwC

Sources of uncertainty

And many more …!

Tax Status Taxable?Deductible?

Unclear/unco-ordinated tax laws and rules

Transfer pricing Permanent Establishments

101November 2017

PwC

Issues addressed by relevant accounting Standards (e.g. FIN 48 and IFRIC 23)

When to recognise? Detection risk?

Changes in circumstances

CHANGE

SAME

Unit of account?

How to measure?

102November 2017

PwC

Decision on disclosure

Transparency to whom and for what purpose?

Transparency to whom and for what purpose?

Stakeholder Why interested? What data? Disclose? Risk? Benefits?

Voluntarydisclosure

Risks and benefitsof (not) disclosing?

Mandatorydisclosures

What are the risks and benefitsof your mandatory disclosures?

Could voluntary disclosures reducerisk or provide benefits?

Draft disclosures

Optimised disclosures

Would voluntary disclosure address a stakeholder interest?

Who is interested in your mandatory

disclosures? Why?

• Are the disclosures understandable to the interested parties?• Do the disclosures maximise benefit to the company and respond to the needs of stakeholders? • How do the tax disclosures fit with broader messages on contribution and impact?

Do you have the systems and processesto support your disclosures?

103

November 2017

PwC

Transparency is key!

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in thispublication, and, to the extent permitted by law, PricewaterhouseCoopers AG, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, inreliance on the information contained in this publication or for any decision based on it.

© 2017 PwC. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers AG which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Thank you

104November 2017

PwC

Being innovative in managing costs

Break-out session, round 2, topic 2

105November 2017

Robert Gachot, CFO, O-I EuropeFrederik Hedlund, CFO, The Nielsen Company (Europe)Wieland Noetzold, Head of Corporate Planning, Sunstar Suisse Darioush Zirakzadeh, Director, PwC Switzerland

PwC

3 categories of initiatives to consider

Business Model Review (Performance & compliance)

These initiatives could have the following

impacts:- Efficiency increase- Workforce savings- Changes in Roles &

Responsibilities- Substance changes- Tax (TP, ITX, CT)

- Service Level Agreements

1

Process, Organisationor systems optimization

(Robotics, Process Automation)

2

Offshoring(Shared Service Centers &

Outsourcing)3

106November 2017

PwC

Swiss tax in the international environment: audits, information exchange, transparency and reform

Break-out session, round 2, topic 3

107November 2017

Christine Benzakein, Vice President Tax, Ralph Lauren EuropeMonica Cohen-Dumani, Partner, PwC SwitzerlandPatricia More, Partner, PwC SwitzerlandThibaut de Haller, Director, PwC Switzerland

PwC

1. Overview of the landscape

November 2017108

PwC

A changing global tax environment with significant business impacts

Increasing Global

Controversy

OECD BEPS

Brexit Unilateral Actions

Increasing Information Reporting &

Transparency

EU GAARATAD I&II

US Tax Reform

State Aid

Increasing focus on

indirect taxes

November 2017109

PwC

A Changing Global EnvironmentA quick overview of OECD BEPS

CoherenceAction 2: Hybrid Mismatch

Arrangements

Action 3: CFC Rules

Action 4: Interest Deductions

Action 5: Harmful Tax Practices

Substance

Action 6: Preventing Tax Treaty Abuse

Action 7: Avoidance of a PE Status

Action 8 - 10: Aligning Transfer Pricing with

value creation

TransparencyAction 11: Measuring and

monitoring BEPS

Action 12: Mandatory Disclosure

Action 13: TP Documentation

Action 14: Dispute Resolution

.Action 1: Digital economy

Action 15 : Multilateral Instrument

15 Actions – 13 Final ReportsNovember 2017

110

PwC

A Changing Global EnvironmentGlobal focus on base erosion and profit shifting

USDiscussion of international tax reform/innovation boxBEPS-inspired actions regarding –• CbC reporting on IRS

business plan• Treasury revises model

tax treaty

South KoreaBEPS-inspired actions regarding –• Tighten thin cap rules • Increased penalties for

tax fraud• VAT imposed on digital

services via foreignopen-market

China BEPS-inspired actions regarding –• GAAR applying to cross-border

arrangements• Artificial avoidance of PE status• Outbound payments to overseas

related parties

CanadaAdoption of OECD’s CbCR standard

EU• State aid investigations• BEPS-inspired legislation

enacted in multiple jurisdictions

• EU ATA Directive

Ireland• Knowledge box being

developed• Phase-out of ‘Double

Irish’ strategy

UK• Corporate rate cut to 17% by 2020• Diverted Profits Tax• Anti-hybrid legislation

MexicoBEPS-inspired actions regarding –• Certain related party payments• Claiming tax treaty benefits• New information returns• Limiting creation of PE for non-

residents.

BrazilBEPS-inspired actions regarding –• Transfer pricing rules• CFC rules. Australia

Diverted Profits Tax enacted

JapanBEPS-inspired actions regarding –dividend exemption rules

IndiaBEPS-inspired actions regarding –• strengthening anti-avoidance rules • increasing scrutiny of treaty structures• Permanent establishments

South Africa BEPS-inspired actions regarding –• Imposition of interest

capitalization rules• Disclosure of

reportable arrangements

Worldwide• MLI signed by 68 countries at

the signing ceremony• Most countries have adopted /

will adopt CbCR legislations

November 2017111

PwC

Anti tax avoidance Directive (I+II)

• Interest deductibility• Exit tax• GAAR• CFC rules * • Hybrid mismatches *

Recommendations to EU member states on how to reinforce their tax treaties in an EU -law compliant manner

External strategy for effective

working with

governance

Anti tax avoidance Directive II

CCTB/CCCTBPublished on

October 26, 2016

State aidOngoing EU

Commission state aid investigation,

e.g. Apple, Starbucks, Fiat.

DAC 6Mandatory disclosure of

tax information (proposal)

DAC 1 mandatory automatic

exchange of non financial information

DAC 2: automatic exchange of

financial account information (2014)

DAC 4CbCR(2016)

DAC 5AML

(proposal)

DAC 3automatic exchange of cross-

border tax rulings (2015)

A Changing Global EnvironmentSome EU measures on base erosion and profit shifting

112

Directive for Administrative Collaboration

(DAC) *

* To be considered for Switzerland November 2017

PwC

A Changing Global EnvironmentNews VAT practices in the EU

Proposal for a Definitive EU VAT system

2 main reasons :

• €50 billion VAT loss each year is estimated to be due to cross-border VAT fraud.

• Many companies consider that the complexity, additional compliance costs and legal uncertainty of the VAT system often prevent them from engaging in cross-border activities and reaping the benefits of the single market.

Two steps approach

01

• Published on 4 October 2017

• Entry into force as of 1st January 2019

• Four areas targeted :

Valid VAT number Chain transactions Call-off stock Proof of intra-Community supply

• Expected during 2018

• Entry into force in 2022

• Main targets :

New “intra-Union supply” Abolition of EU supplies and acquisitions Dependency of Certified Taxable Person One-Stop Shop

01

“Quick wins” measures Definitive EU VAT system

113

02

November 2017

PwC

A Changing Global EnvironmentNews VAT practices in the EU

Mechanisms for the Effective Collection of VAT/GST

• On 24 October, OECD released a report which focuses on the rulesand mechanisms for the effective collection of VAT/GST on cross-border supplies of services and intangibles in cases where the supplieris not located in the jurisdiction of taxation.

• Willingness to ensure that VAT/GST is properly paid on thecontinuously growing online trade in services and digital products.

114

Increasing collaboration between tax authorities

• Communication from the Commission to the European Parliament ,the Council and the European Economic and Social Committee on thefollow-up to the Action Plan on VAT.

• The Commission has launched the development of the TransactionNetwork Analysis for the exchange and joint processing of targetedVAT data by risk analysis officials of the Eurofisc network.

• This new instrument will allow tax administrations to stop fraudulentnetworks in a simpler, quicker and more secured way.

November 2017

PwC

A Changing Global EnvironmentIncreasing collection of data by tax authorities

SAF-T based on OECD’s format (full or partial content)

Other e-files or additional reporting (some of SAF-T content covered - usually GL or billing, but not same data aggregation/ specific formats)

Discussion about implementing SAF-T/e-files

No e-file /no information

Last updates:- Control statement in Italy since Q1 2017- New real-time VAT reporting regime in Spain since July 2017- Amended SAF-T structure in Portugal since July 2017

Coming up soon:- New excise duty documentation in Lithuania effective 1 November 2017- New SAF-T VAT structure Poland effective 1 January 2018- Implementation of SAF-T in Norway postponed to 1st January 2018- New real time reporting in Hungary postponed to July 2018

DENMARK

LUXEMBOURG

PORTUGAL

SPAIN

FRANCE

ITALY

FRANCE

IRELAND

UNITEDKINGDOM

NETHERLANDS

BELGIUM

GERMANY

SWITZERLAND

AUSTRIA

CZECHREPUBLIC

POLAND

SLOVAKIA

NORWAY

SWEDEN

FINLAND

ESTONIA

LATVIA

LITHUANIA

SLOVENIA

HUNGARY

ROMANIA

BULGARIA

GREECE

ANDORRA

LIECHTENSTEIN

MONACOITALY

Edinburgh

Stavanger

Goteborg

Krakow

GdanskHamburg

Bremen

Leipzig

Leeds

Porto

Gibraltar

Sevilla ValenciaBarcelona

Palermo

Cagliari

Naples

Bordeaux Lyon

Marseille

Venice

Geneva

Genoa

StrasbourgMunich

Belfast

Amsterdam

Copenhagen

Stockholm

Ljubljana

Athens

AndorraLa Vella

VaduzBratislava

Budapest

Madrid

Bern Vienna

Berlin

PragueLuxembourg

London

Brussels

Vilnius

Tallinn

SofiaRome

Bucharest

Paris

Lisbon

Dublin

Warsaw

Riga

HelsinkiOslo

Öland

Gotland

Bornholm

BALEARICISLANDS

Corsica

Sarinia

Sicily

Crete

IrishSea

TyrrhenianSea

IonianSea

LigurianSea

Cyprus

MALTAOutside EU:- Real time reporting in Brazil- Implementation of GST in India- Implementation of VAT in the GCC countries

115

Many data are already collected and available for the tax authorities. Who will be able to use them first? Businesses or tax authorities?

November 2017

PwC

2. Switzerland in the changing landscape

November 2017116

PwC

Abolition of tax regimes (holding, mixed, domiciliary, principal and finance branch regimes)

Overview of the TP 17 measures

Tax Proposal 17

Mandatory cantonal Patent Boxaccording to OECD-standard

Increase of partial taxation of private dividend income

Federation: 70%

Cantons min. 70%

Increase of cantonal share indirect federal tax revenues

from 17% to 20.5%

Basis: Legal certainty & investment security

Optional cantonal R&D super-deduction (max. 50%)

Increase of children and educationallowances

by CHF 30

Maximum limitation of reliefs of max. 70%

Separate taxation of formerly tax free hidden reserves (during 5 year transition period)

Current cantonal step-up practice and tax effective depreciation of hidden reserves (max. 10 years; DTA)

Adaption of cantonal capital tax basefor parti-cipationsand patents

Cantonal rate reductions

No longer included:

NID

Abolition of issuance stamp tax

Deferred:

102

November 2017

PwC

Other measures planned by Switzerland?BEPS and other action items

BEPS Action items Comments

BEPS Action item 3 (CFC)

• No CFC rules at this stage and no plans to introduce CFC regime

BEPS Action item 4(interest deductions)

• Current Swiss thin cap rules are seen as being sufficient to counter unreasonable interest deductions. No plans to introduce further limitations (e.g. fixed / group ratio rules)

BEPS Action item 5 (harmful tax practices)

• Current harmful tax practices (Federal / cantonal tax regimes) will be abolished with TP17(cf. previous slide)

• Legislative framework for spontaneous exchange of tax rulings from FY 2018 implemented

BEPS Action item 6 (prevent treaty abuse)

• PPT or LOB clauses are included in current Swiss double tax treaties• Multilateral instrument (MLI): Switzerland will adopt PPT option

BEPS Action item 13 (CbCR)

• Switzerland signed multilateral competent authority agreement for automatic exchange of CbC reports (from FY 2020)

BEPS Action item 14 (dispute resolution)

• Various Swiss double tax treaties already include arbitration provisions• MLI: Switzerland will adopt mandatory arbitration provision

Other • Increased criminal liabilities (in particular for company officers) in case of aggressive tax planning -> art. 6 of the Administrative Criminal Law Act (loi sur le droit penal administratif– RS 303.0)

103November 2017

PwC

3. What to expect?

November 2017119

PwC

A changing global tax environment with significant business impacts

OECD BEPS 2 ?

Tax planning Vs.

Business planning? Increased Global

Controversy

Global availability of tax-related information

Public availability of information?

Significant investment in IT

Increased use of black lists?

Impact on State’s autonomy

Global compliance and reporting costs increaseStandardization of

cross-border / cross-specialty

audits

Standardization of criminal

implications?

Improved dispute resolution

mechanism

Principal Purpose Test

November 2017120

PwC

Panel discussion: perspectives on the future of Switzerland in a global setting

121November 2017

Christine Benzakein, Vice President Tax, Ralph Lauren EuropeBala Nallama, Financial Controller Switzerland, Coty Fredrik Hedlund, CFO, The Nielsen Company (Europe)

PwC

“What, in your opinion, are the key challenges Switzerland is currently facing?”

• High costs

• Restrictions on Migration

• Uncertainty with Tax Reform

• Relationship with the EU

• Other

Polling Question:

122November 2017

PwC

Conclusions

123November 2017