Romandie's into TP

A brief outline of transfer pricing topics by industry in the Romandie

Transfer pricing (TP) is hotter than ever for multinationals and tax authorities worldwide.  With a rich variety of multinationals, the Romandie too is into TP.  There are also some industry-specific topics. This blog outlines TP issues faced by many industries in the region.

Is your multinational based in the Romandie?

You may be a key stakeholder in one of the many multinationals that have chosen to establish their operations in the French-speaking part of Switzerland, known as the Romandie. 

This business-friendly environment continues to attract multinationals of all sizes across a spectrum of industries, commodities, life sciences, and technology, to name but a few. 

Such a dynamic economic environment inevitably puts transfer pricing (“TP”) in the spotlight. TP lies at the heart of multinationals’ operating models. It governs how trade is conducted across borders within the group, in line with business and regulatory requirements. And with inreased scrutiny on TP issues from various stakeholders such as the public, banks and tax authorities, the Romandie is, more than ever, into TP .

A brief tour of transfer pricing topics in Romandie's industries

Below are examples of issues that companies in some of the region’s industries are tackling. 

Software and technology

  • These industries typically favor international employee mobility and remote working. The international dispersal of decision makers often results in consideration of profit(or loss) split and the design of a transfer pricing model that adapts to employee location. 
  • Additionally, recognition and compensation of intangibles remains a key issue to maximize value for investors and avoid tax audit challenges and hefty exit costs.  
  • Finally, start-ups, scale-ups and unicorns requiring significant external funding may need to review the resulting intercompany financing implications (guarantee fees, interest rates, etc).


  • Global events continue to underscore the importance of commodities and explaining TP results in the context of commercial reality. Many questions continue to arise from profit allocations that deviated from plan, for example due to a refinery closure or risk materializing despite a planned so-called back-to-back arrangement. 
  • Having a written policy is now much higher up on the agenda as banks take Environmental, Social and Governance (“ESG”) principles into account in their lending. And these intra-group pricing policies need to be reviewed from time to time, in line with business and regulatory changes. This could be related to emerging new business models or updates in country rules and practices. The long-awaited adoption of OECD principles by Brazil – a key source country for commodities – and the implementation of a corporate tax regime by the United Arab Emirates, a global trading hub, are two examples. 
  • The fast pace of commodity trading also means that companies need to be agile in maintaining the contemporaneous documentation that may be required many years later in tax audits. This is especially important as many commodity traders rely on market price comparisons for their transfer pricing. 

Life sciences 

  • Groups specializing in new therapies have flourished in the Romandie in recent years. These initially small, research-focused companies often go global. They then need to design global pricing systems that address the industry’s specific characteristics such as increased regulation and IP complexity or supply chain diversification. Such companies often need to balance the agility of evolving business models with the need to meet increasing compliance requirements.  
  • Flexible working preferences also have to be reconciled with tax models. 

Asset management 

  • Asset management has come under increased scrutiny from tax authorities in recent years. Multinationals continue to verify and document that their profits are aligned with their substance. For instance, that decision-making responsibilities are outsourced to related parties with the relevant skills and resources.
  • Other key focus areas include the remuneration of distribution/origination companies in fund structures and intercompany financing arrangements.  

Industrial goods and foodtech

  • These industries often rely on distributors with more limited risk profiles to perform wholesale activities to distribute goods. Attention will therefore need to be paid to the OECD’s Amount B proposal, which will be incorporated into the OECD Transfer Pricing Guidelines. 
  • Sectors are evolving toward increased digitalization, although the major changes are likely yet to come. Companies continue to monitor for potential changes in their value chain and the resulting impact on profit allocation. 
  • Rising prices and costs remain a key challenge for manufacturers, leading to questions about price adjustments in transfer pricing systems. 

Consumer and luxury goods

  • Consumer goods have seen important changes in consumer behaviors post pandemic due to increased e-commerce and inflation, among others. Supply chains are evolving and business models are being restructured in response to changing market forces, whether through increased centralization or the introduction of D2C (“Direct to Consumers”). Such changes have many transfer pricing implications, such as the potential remuneration associated with the transfer of activities and the remuneration of new e-commerce platforms. Switzerland, including the Romandie, offers the possibility to obtain advance pricing agreements from the tax authorities on such matters. 
  • Amount B is also relevant for companies relying on related wholesale distributors. 
  • The EU Directive on Public Country-by-Country Reporting (“CbCR”) creates additional compliance and new communication requirements for privately held groups.

What multinational companies can consider

  • Review the potential transfer pricing implications of updates in your group’s value chain, taking into account your industry and company-specific developments, including any moves toward increased digitalization, new business models and restructuring of your group’s operating models. 
  • Implement processes to stay on top of and implement national and supranational regulatory changes such as the global minimum taxation Pillar 2’s transitional CbCR safe harbor arrangements, EU Public CBCR and Amount B in connection with wholesale distribution activities. 
  • Monitor your TP policy for intercompany financing, a continously popular area of scrutiny for both the federal and cantonal tax authorities. 
Olivia Gedge
Olivia Gedge

Director, Global Transfer Pricing Services

KPMG Switzerland

Blog author Camille Vilaseca
Camille Vilaseca

Expert,Global Transfer Pricing Services

KPMG Switzerland