Swiss Court Tightens Scrutiny on Intra-Group Service Charges
- GTC Global
- Nov 5
- 1 min read
May 2023
The Swiss Federal Administrative Court assessed the deductibility of intercompany service fees and management charges between two related entities. The Swiss tax authority argued the charges lacked commercial justification and duplicated group-wide services, asserting they failed the arm’s length principle.
The Court agreed, concluding the taxpayer did not sufficiently prove measurable benefits arising from the services rendered.
By affirming the tax authority’s position, the Court underscored the importance of demonstrating substance and clear benefits in cross-border related-party transactions.
The ruling reinforces Switzerland’s alignment with OECD transfer pricing standards and highlights stricter scrutiny of intra-group services.
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