The alternative is to negotiate the BEPS minimum standards bilaterally, which requires a parliamentary approval process. That is why Switzerland has already included these minimum standards in the DBA along with Brazil, Latvia, Kosovo, Pakistan, Saudi Arabia, the United Kingdom and Zambia. Further changes to the DBA will continue. For some contracting parties, such as us the United Kingdom, Switzerland has opted for a change in the DBA without including the MLI agreement. As an important player actively involved in all OECD work processes under BEPS, Switzerland supports international efforts to promote equal conditions of competition and transparency. It pursues the idea of reaching an agreement on the implementation of the MLI with other countries and thus modifying other DAAs accordingly with the help of the MLI. Switzerland has decided to limit itself to a large extent to the introduction of minimum standards. This includes an amendment to the preamble (an amendment that contains a declaration that no party intends to offer opportunities for non-taxation or tax reduction through tax evasion or tax evasion, including through a contractual purchase). In addition, Switzerland will introduce the Purpose Principle Test (PPT). Under this test, contractual benefits are essentially denied where the granting of contractual benefits appears to be the main purpose of a transaction or agreement, unless the granting of that benefit is consistent with the purpose and purpose of the corresponding provision of the contract. With regard to hybrid asymmetries, Switzerland will introduce Option A.
To simplify, this is a switching clause for the Swiss which provides that the provisions of a tax agreement that normally exempt income or capital from tax do not apply when the other contracting state exempts or limits the taxation of such income or capital. The introduction of a Mutual Agreement Procedure (MAP) to improve dispute resolution is a new binding amendment, but it is not expected to have a significant impact on Swiss tax treaties, which already contain poPs provisions. Finally, Switzerland has agreed to include binding arbitrations in its tax treaties. Switzerland will implement minimum standards either through the MLI or through bilateral negotiations on double taxation conventions. It has signed 94 bilateral tax treaties. 14 of these must be directly modified by the MLI (tax agreements with Argentina, Chile, India, Iceland, Italy, Liechtenstein, Lithuania, Luxembourg, Austria, Poland, Portugal, South Africa, the Czech Republic and Turkey).