Switzerland has no specific CFC rules. Foreign companies are in general recognized from a Swiss tax perspective if they are managed and controlled offshore and are not set up solely in order to avoid Swiss taxes.
Nevertheless, using the following arguments the Swiss tax authorities might consider (part of) the profit of an offshore company as taxable in Switzerland:
- If the effective place of management of the company is considered to be in Switzerland (taxation of the total profit of the company in Switzerland)
- If the offshore company is considered to have a permanent establishment in Switzerland.
- If the structure, in particular the offshore company, is considered to be tax avoidance (bizarre proceeding/structuring which can only be explained by possible tax savings and effective tax savings occur).
In case of offshore companies it is in particular relevant that the offshore company has sufficient substance (office space, employees etc.).