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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

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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