Transfer Pricing: 5 Tips

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David McDonald from PwC suggests in TMI (Treasury Management International) 5 things that help you stay active and up to date on transfer pricing:

  1. Statement: Group Tax is responsible for transfer pricing. Treasury sets and applies the policies.
    Risk: Without clear communication between the treasury and tax departments, there is a risk of penalties.
  2. Statement: We have a great policy established and 2017 by a specialist and run it this way.
    Risk: In 2020, the OECD published detailed guidelines focused on IC-loans, cash pool, guarantees, hedging, and captive insurance. We stayed tuned and made the necessary updates.
  3. Statement: We have benchmarks; we use fixed rates from 2020.
    Risk: Prices have changed significantly in the last 12 months. The use of outdated benchmarks is dangerous.
  4. Statement: The excellent bank relationship ensures indicative quotes for IC-transactions.
    Risk: OECD guidance state clearly that bank quotes are not an acceptable form because tax authority can/will ignore them. Use a transfer pricing benchmark that can be defended.
  5. Statement: Performing detailed analyses on every loan and related party.
    Risk: IC-Loan amount/size matters for tax at risk. A 5m IC-loan is less at risk than a 50m IC-loan. Use a standard policy that applies to 80-90% of intra-group loans and only evaluate the largest transactions.

Details in the PwC report on TMI (Login required, report available at Tomato)

Zahlungsverkehr via SAP-BCM-MBC – wie geht das?

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Diese Lösung ist interessant für alle, die den ZV konzernweit mit SAP-Modulen abwickeln wollen. Weiterhin geht es um zentrale Visibilität und lokale Verantwortung.

Unsere vielfach präsentierte 8-seitige PDF haben wir mit dem SAP-Modul MBC Multi-Bank-Connector erneuert. Es bietet eine verbesserte integrierte Wahl der Bankkanäle SWIFT, EBICS oder H2H (H2H = manuelle Verbindung).

Alternativ zum SAP-MBC kann man es, wie bisher, mit dem SAP-BCM (zentrales e-banking Freigabe-tool), mittels sFTP mit einem Swift Service Büro verbinden.

Integrierter und bequemer ist, die Zahlungsfiles aus dem SAP-FI (Lieferanten) dem Freigabetool BCM an BCM zu übertragen. Im MBC wählen Sie, welchen Kanal Sie zu einer Partnerbank nutzen (Swift oder Ebics). Die vorab zentral evaluierten und gewählten wenigen Partner-Bank(en) sind mittels Pflichtenheften zu bestimmen (Slide 8).

Der Buchstabendreher BCM / MBC ist eventuell von SAP gewollt.

Für non-SAP Module zeigen wir unter Option 3 (Seite 7) die non-SAP Cockpit Lösung mit einem non-SAP-TMS.

Do you prefer English?

We have just updated the option 1- slide 5 with SAP BCM MBC. In the previous version, the connection was made via sFTP to the Swift Service Bureau. Now the SAP-MBC module takes over this work/connection to the before evaluated, chosen, and reduced few partner-bank(s).

View slide in detail at Tomato’s Fachbeiträge  

If you have installed and use MBC, please send your experience to martin.schneider@tomato.ch

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Änderungen der Schweizer Gemeindesteuer seit 2010

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Steuerland Schweiz: So hat sich die Steuerbelastung in Ihrer Gemeinde seit 2010 entwickeltDie NZZ-Steuerkarte zeigt wie stark die Einkommen in den Schweizer Gemeinden belastet werden und wie sich die Steuern seit 2010 verändert haben. Wollen Sie prüfen, wie sich die Steuerbelastung in Ihrer Gemeinde und Nachbargemeinden entwickelt hat?

Effektive Steuerbelastung in Prozent des Bruttoerwerbseinkommens im Jahr 2022 (Summe der Belastung aus Kantons-, Gemeinde- und Bundessteuern), für verschiedene Einkommensperzentile und Haushaltstypen:

Lesen Sie mehr über die Gemeindesteuern in der NZZ (7 Artikel in der Woche sind gratis) und finden Sie eine interaktive Karte der Schweiz.

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Digital Nomads and Remote Work – Interactive Map by KPMG

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KPMG has created an interactive overview to help navigating the immigration challenges: The Digital Nomad and Remote Work Visa Options (interactive map). 

The overview, on 72 pages for 36 countries, is sorted by region and country and is being updated regularly. It covers topics like Visa category, fees, Visa duration, standard requirements as well as tax and social security implications.

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Explore the KPMFG digital Nomad Remote Work Tracker Map – PDF 

Dangers of AI

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2023 will undoubtedly be the year of artificial intelligence. AI technologies have been used and abused and the dangers have become quite scary.

Geoffrey Hinton, 75, the creator of the deep learning technique that powers ChatGPT and other AI systems, recently announced his resignation from Google, saying he now regretted his work and  is leaving Google in order to talk openly about the dangers of AI without jeopardizing the company. He told the BBC: “Right now, AI chatbots are not more intelligent than us, as far as I can tell. But I think they soon may be.”

Some tech leaders are even asking for an AI moratorium. 

To what extent will AI impact our lives is something worth watching. Unimaginable what the future holds!

TARGET2 Successfully Launched on March 20, 2023

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In our November 2022 Tomato Catch Up, we discussed the postponement of the TARGET2 project, along with the ISO 20022 migration extension. The go-live date was pushed out from November 21, 2022T to March 20, 2023, to ensure greater system stability and user readiness.

Target2 is Eurosystem’s new real-time gross settlement (RTGS) system and central liquidity management tool. The users of TARGET2 are the EU central banks and the commercial banks in each member country. More than 1,700 banks use TARGET2 to make transfers in euros for themselves or for their customers.

The migration to the new system took place between 17 and 20 March 2023. The first day of TARGET2 operations went smoothly despite a delayed closure, which was identified and fixed. The new RTGS system settled around 400,000 transactions, similar to the average volume before the migration. The software and the environment for the new system were delivered by the Banca d’Italia, the Banco de España, the Banque de France, and the Deutsche Bundesbank (the four central banks that act as service providers for TARGET services).

Read the official press release on the ECB website.

PwC Webcast: IFRS Technical Update

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The latest PwC IFRS update webcast covers the following topics:

  • New in 2023: IFRS Standards and amendments newly effective in 2023 (18 Minutes)
  • Hot topics, hyperinflationary economies, supplier finance arrangements, carbon credits (14 Minutes)
  • Spotlight on tax: OECD global minimum taxes (Pillar Two), EU Windfall taxes (21 Minutes)

More webcasts can be accessed via the same link. 

Click here to listen the PwC Webcasts in English

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How will an RfP really serve you?

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How can you obtain excellent answers from vendors that will enable you to choose the one that will ensure the successful implementation of your project into a reliable long-term solution.

1) The RfP can be prepared by an internal person, by a young and lesser-qualified person, or with the help of an experienced external consultant.

2) RfPs often contain 100 or more questions because every single detail is critical. It becomes problematic when a provider hires a not-so-experienced person who may simply lack the skill in recognizing all the details. It really pays to hire an experienced specialist who knows the vendors, is neutral, and sometimes skips questions because the essentials are built in anyway.

3) Do not believe all the answers you receive. It is imperative that vendors answer perfectly to get the job. Also, verify that the vendor’s team is prepared to provide long-term support to you as a client.

4) The responses from a small vendor should be evaluated differently than the identical responses from a large international vendor. Read between the lines.

4) Keep all communication channels open to send documents and emails back and forth. Sometimes one phone call can unravel many lines of an email.

5) Are your finance, accounting and IT people willing to work the hours it takes to get the project completed? Are these people willing to work as a true team with the vendor?

6) Are you prepared to adjust goals when things change? Examples: the software decided upon is purchased from another vendor, internal accounting is suddenly involved with another project, the ERP may change, etc. etc.

Call Martin Schneider for a mutual exchange and accept the counsel from others who have a similar project.

Get inspired by the basic texts on our free Tomato RfP in German and Tomato RfP in English.

Taxes: BEPS 2.0 – Base Erosion and Profit Tax Shifting

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Ein Bericht von PwC. Die jahrelange Diskussion um die Besteuerung grosser internationaler Konzerne wird bald Realität. Das von der OECD vorangetriebene Projekt «Base erosion and profit shifting 2.0», besser bekannt unter dem Kürzel «BEPS 2.0» – wird zu signifikanten Umwälzungen in der Steuer- und Standortpolitik führen.

Im Bericht in deutscher Version lesen Sie zu den Topics:

  • Zum Hintergrund
  • Säule 2 im Überblick (Unternehmen von 750 Mio. weltweiten Umsatz)
  • 15% Steuern wovon?
  • Konsequenzen einer Niedrigbesteuerung
  • Was bedeutet dies für die Schweiz?
  • Fazit

Details bei PwC

Do you prefer English?

On 2 February 2023, the OECD released the Agreed Administrative Guidance for the Pillar Two GloBE Rules as part of the Implementation Framework. The Guidance covers 26 topics regarding Scope, Income and Taxes, Insurance companies, Transition period, and Qualified Domestic Minimum Top-up Taxes. Further Guidance can be expected to be published on an ongoing basis. The Administrative Guidance will be incorporated into a revised version of the Commentary that will be released later this year. 

Details at PwC Switzerland

What is SWIFTnet?

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What is SWIFTnet – 99 Problems but SWIFT Connectivity Ain’t It

From the same source the author describes Swift for Corporates. Here in no particular order: A single global bank connectivity solution. The overall bank architecture is simplified and standardized across the different banking partners;

  1. Improved controls: you can implement better controls and replace manual interfaces with an automated SWIFT solution;
  2. Reduced internal & external costs of maintaining and supporting multiple solutions and of various bank solutions. Cost reduction depends on the number of banks with whom you have a bank interface, number of bank interfaces, traffic volume, number of countries that you’re operating in;
  3. Security: SWIFT offers corporates a trusted global solution;
  4. Reliability: SWIFT boasts 99.99% network availability and has never ‘lost’ a FIN message;
  5. A global solution: corporates can take advantage of the SWIFT network and connect with their banks and bank branches around the world;
  6. Straight Through Processing – STP: standard global data formats for payments (MT101 and ISO20022 XML PAIN.001) and bank statements (MT940 / MT942 formats). By ensuring that your ERP systems can generate and accept these SWIFT standard formats, you can start building efficient global daily processes. This enables your payment messages to go straight through the process at the bank and reduces the time spent on manually entering bank statements and / or fixing payment errors.

Source SEPA for Corporates