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Switzerland: LIBOR phaseout implications for tax and transfer pricing

Switzerland: LIBOR phaseout implications for tax

The shift away from LIBOR is seen as a significant development for financial markets. Swiss businesses will need to plan for how they will adapt to the transition from LIBOR. Some challenges will affect businesses as a whole, whereas others will need to be resolved by individual organizations.


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The LIBOR transition will also affect tax and transfer pricing-related documentation, agreements, and systems enablement. For the past 20 years, LIBOR has been the de facto industry standard for most intercompany funding arrangements. Consequently, LIBOR has been a key part of tax and transfer pricing-related documentation, agreements and systems enablement—for example, in-house banking solutions.

Decommissioning the LIBOR benchmark in 2021 will affect organizations with internal financing arrangements. Mitigating the impact requires planning.

The potential tax challenges for taxpayers arising from the LIBOR transition include revising:

  • The principles of existing intercompany funding arrangements
  • All aspects of documentation, policies and agreements underpinning those arrangements
  • In-house banking and similar systems set-up
  • Various rulings and arrangements involving tax authorities including advance price agreements (APAs)

Read a July 2019 report prepared by the KPMG member firm in Switzerland

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