The Swiss tax system and issues related to transactions with Italian companies

The European Union is the most important commercial partner of Switzerland, thanks to its geographical position. EU represents approx. 62% of Switzerland’s total exports and 80% of imports.
Italy is the second most important commercial partner for the Confederation after Germany. Our country exported CHF 18,7 billion (€ 11,7 billion) and imported CHF 16,3 billion (€ 10,2 billion) in transactions with the Alpine country in 2006.
I have decided to analyse the Swiss tax system and tax issues related to transactions with Italian companies because I hope in the future to work for a Swiss company or as a consultant in Switzerland. My interest in the topic also derives from my internship in a Swiss consulting company in Lugano. I was interested in the job, but the lack of Swiss taxes and international tax law knowledge represented a problem.
The analysis is structured on a preliminary overview of the Swiss tax system, explaining its different levels: Federal, Cantonal and Communal. The second part will discuss the most important types of limited companies operating in Switzerland, with whom European companies have the majority of transactions. In the third part the opportunity for Swiss holding and auxiliary companies to benefit from special tax regimes will be described.
The following section will describe and analyse international treaties regulating dividend, interest, royalty payments between Swiss and EU companies and between Swiss and Italian companies.
The last part will deal with the Italian Controlled Foreign Company (CFC) rules applied in transactions with the Swiss companies that benefit from special tax regimes.