Switzerland > Legal Developments > Tax & Private Client
Search News and Articles
Two important tax decisions have been rendered...
by the Swiss Federal Supreme Court in the field of tax-loss carryforward. The first one offers the possibility to set off losses of an ab-sorbed company which was in liquidation against the profit of the absorbing company. The second one deals with the carryforward of losses incurred as the company benefited from a holding status against the profit of the company after the holding status has ended. 104 Newsletter No. July 2012
Lump Sum taxation
The head of our tax practice group, partner Dominique Christin, summarises the legal requirements to obtain a lump sum taxation status in Switzerland and in the cantons of Geneva and Vaud.
Swiss Tribunal Sides With Taxpayer in Beneficial Ownership Case
by Marcus Desax and Martin Busenhart
In what appears to be the first reported court case worldwide dealing with beneficial ownership as it applies to total return swaps in a tax treaty context, the Swiss Federal Administrative Tribunal has handed down a judgment in favor of the taxpayer.
Swiss Tax Authorities Clarify Treatment of a Shareholding in a U.S. LLC
by Peter Hongler
September 6, 2011, the Swiss Tax Conference published guidelines on the Swiss tax characterization of an investment in a U.S. limited liability company. 1 The Swiss Tax Conference — an association of the Swiss federal and cantonal tax administrations — issues recommendations to the Swiss tax authorities to harmonize specific tax issues nationally; they are not binding on the courts.
New tax regulation to stimulate the Swiss bond market
by Johannes Bürgi, Thomas Meister and Thomas S. Müller, Walder Wyss Ltd
The Swiss domestic bond market virtually died after the Swiss Federal Stamp Tax Act came into force back in 1973.
New tax regulation to stimulate the Swiss bond market
The Swiss domestic bond market virtually died after the Swiss federal stamp tax act came into force back in 1973. Swiss insurance stamp tax must be paid on the insurance bonds by, among others, a Swiss-resident company or the Swiss-registered branch of a foreign resident company.
Switzerland’s new information exchange policy and new Protocol to DTAA India-Switzerland
1. Reasons to revise Double Taxation Avoidance Agreement (DTAA)
2. Status of new Protocol to DTAA
3. Application of new Protocol to DTAA
4. Development of Swiss policy of tax information exchange
Tax Rulings in an International Framework
1. What is a ruling and who can ask for it?
2.Transparency of bases of Rulings
3. General attitude towards ruling practice
4. Access to rulings granted
5. Standard of foreseeable relevance for exchange of information under Art.26 OECD MD
Abolishment of Swiss Issuance Stamp Tax
Abolishment of Swiss Issuance Stamp Tax will stimulate the Swiss bond mar-ket. The Swiss Too Big to Fail Banking Act Reform Bill, which mainly deals with the capital adequacy requirements and organisational measures required to ensure that systemically important banks can be «wound up» in an orderly fashion, also aims to abolish the issuance stamp tax on loan and cash debentures. It is likely that this new tax regu-
lation will boost the Swiss bond market.
Is There Uniform Taxation of Trusts In Switzerland?
by Natalie Peter
Reprinted from Tax Notes Int’l, July 18, 2011, p. 183
In common law jurisdictions, trusts are widely used for asset protection and estate tax planning purposes. The formation and administration of trusts as well as distributions to beneficiaries are significantly influenced by fiscal aspects.
Double taxation agreement with Georgia enters into force
Bern, 05.08.2011 - The double taxation agreement (DTA) with Georgia in the area of taxes on income and capital has entered into force. There was no DTA between Switzerland and Georgia previously, and the new DTA should contribute to the further positive development of bilateral economic relations.
Swiss Near Tax Treaties With Germany and Britain
By MATTHEW SALTMARSH
LONDON -- Switzerland is close to signing sweeping tax treaties with Germany and Britain intended to ensure that assets belonging to citizens of those countries held in Swiss banks will no longer escape tax.
The Federal Authorities of the Swiss Confederation
Switzerland and Spain sign revised double taxation agreement
Berne, 27.07.2011 - Today in Madrid, Switzerland and Spain signed the protocol to amend the double taxation agreement (DTA) in the area of taxes on income and capital. The revision will contribute to the further positive development of bilateral economic relations. The revised DTA also contains provisions on the exchange of information in line with the internationally applicable standards.
UBS Case – Data transfer to the IRS blocked by the Federal Administrative Court
A decedent estate cannot be addressee of a data transfer decision, Federal Administrative Court
UBS Case – transfer blocked in case of several bank accounts
The conditions must be fulfilled for each account individually, Federal Administrative Court
The plaintiff beneficially held one UBS bank account through a company and another UBS bank account through a foundation.
Federal Council adopts dispatch on Tax Administrative Assistance Act
Berne, 06.07.2011 - Today, the Federal Council took note of the result of the consultation procedure and adopted the dispatch on the new Federal Act on International Administrative Assistance in Tax Matters.
UBS Case - Data transfer confirmed
- bank account held through a Liechtenstein foundation, Federal Administrative Court
The plaintiff argued that the UBS Agreement was not applicable because she does not beneficially own the bank account of the Liechtenstein foundation.
UBS Case
The plaintiff raised a number a fundamental rights and prohibition of retroactivities that had already been considered and rejected by the Federal Court in other UBS matters. The right to keep silent and not incriminate oneself (art 14 § 3 litt g UNO Pact II and art 6 ECHR) are not applicable to international assistance procedures.
UBS Case - Data transfer blocked
The data transfer in dispute had already been refused by the FTA in a former decision, Federal Administrative Court
Global Forum
Switzerland first success at peer review
CAPITAL CONTRIBUTION PRINCIPLE JANUARY 2011
HOW TO TAKE BEST ADVANTAGE OF THIS NEW TAX PRIVILEGE?
The new legislation applies to any shareholders’ contributions
made since 1 January 1997 and is applicable on
all three federal levels. This reform represents a substantial
change in Swiss tax law and is one of the key
elements in the Swiss Corporate Tax Reform II.
Securing the future in a family business: inheritance and tax law issues
If a self-employed person would like to secure the future of his1
business, he is confronted with numerous questions. In addition to
strategic and financial considerations, the needs of the family play
a decisive role. The entrepreneur should clarify, in consultation
with the members of the family, whether one or more family
member(s) are suitable and willing to carry on with the business.
Vom Nennwertprinzip zum Kapitaleinlageprinzip
Steuerersparnis für Investoren und Unternehmer
Swiss Capital Contribution Principle
As per 1 January 2011 a new regulation in the Swiss tax law concerning the tax treatment of the repayment of capital contributions enters into force. According to the new rules the repayment of capital contributions is exempt from Swiss income tax (if the shares are owned as private means) and Swiss withholding tax.
KAPITALEINLAGEPRINZIP – ES BESTEHT HANDLUNGSBEDARF
Erfüllt das neue Kreisschreiben zum Kapitaleinlageprinzip den Willen des Gesetzgebers? Der 1. Teil des Beitrags ist im ST 2010/10 erschienen. Der vorliegende 2. Teil widmet sich einzelnen Spezialthemen wie Sanierung, Rückkauf eigener Beteiligungsrechte, Umstrukturierungen und Auslandsgesellschaften sowie der Frage der Verbindlichkeit von Kreisschreiben.
Deemed Professional Trade in Securities –Good News and Bad News!
While trade in securities continues to be taxed as income fromself-employed activity, the Swiss Federal Supreme Court’s decision of 23 October 2009 now offers legal clarity.
Mutual legal assistance in tax matters – a Swiss revolution
Early in 2008, an article was published in the journal of European Criminal Law, on Mutual Judicial Assistance between Switzerland and the EU States. It contained an overview of Mutual Judicial Assistance between Switzerland and the EU States with emphasis on the development of Mutual Judicial Assisiatnce under the Schengen Agreements and in particular in the framework of tax offences.
Newsletter September 2010
Legal & Tax Updates
Swiss Tax Consequences of Currency Conversions
The Swiss Federal Supreme Court recently held that variances resulting from the conversion of the statutory accounts from a foreign functional currency into Swiss francs must be accounted for in the shareholders' equity account, a result consistent with International Financial Reporting Standards (IFRS). This NewsLetter discusses tax issues and other consequences of this decision.
Practical Guidance for Arbitrators and Counsels on Value Added Tax in Arbitration Proceedings
In a gem of a judicial comment on the alleged simplicity of the modern VAT system, Lord Justice Sedley sardonically remarked: “Beyond the everyday world … lies the world of VAT, a kind of fiscal theme park in which factual and legal realities are suspended or inverted. In this complex parallel universe …relatively uncomplicated solutions are a snare and a delusion”1.
Kapitaleinlageprinzip – Handlungsbedarf für Unternehmen im Jahr 2010
Ein Ziel der Unternehmenssteuerreform II, welche seit 2009 ratenweise in Kraft tritt, ist bekanntlich die Einführung des sog. Kapitaleinlageprinzips.
Switzerland to adopt OECD standard on exchange of information
This Homburger Bulletin shall give an overview over the exchange of information in fiscal affairs (administrative assistance) under the recently concluded double taxation treaties by Switzerland.
Swiss Tax Amnesty
On 1 January 2010, the Swiss Federal Law on the Simplification of Additional Taxation for Inheritances and the Introduction of Self-Reporting without punishment will enter into force. This News-Letter deals with specific issues in this regard.
Estate Planning for Patchwork Families
When the Swiss Civil Code (SCC) and its (to date largely unchanged) rules of succession law came into force in 1912, only 4 out of 10,000 persons were divorced. Hence, a long-lasting matrimony was the normal case. Today, the divorce rate is 27 per 10,000 persons. Many divorced persons re-marry and some of them have children again – the result is the so-called patchwork family. The rules of succession law of the SCC do not sufficiently consider the particularities of such patchwork families. The following article identifies certain patchwork family succession planning challenges and possible solutions.
Typical Difficulties in Cross Border Estates
Crossing borders has never been as easy as it is nowadays and, therefore, more and more people are moving around the world to live and work in different countries. Whilst the developing world is converging in many aspects the legal systems still vary greatly between countries. This fact is ignored by many people having ties with more than one country. They often believe that their personal matters such as their future estate will follow the rules of their ‚home’ country. In order to avoid unpleasant surprises we herewith like to highlight typical difficulties in a cross border estate:
Parliament Passes Bill to Overhaul VAT System
On June 12 2009 Parliament passed the Value Added Tax Act Reform Bill. The new legislation will completely replace the existing value added tax (VAT) legislation and will introduce significant changes in key areas. Unless a referendum is held, which appears unlikely, the new law will come into effect on January 1 2010. This leaves businesses with only a few months to prepare for the transition.
Switzerland Agrees on Information Exchange With Japan, Netherlands
The Swiss Federal Department of Finance (FDF) on June 26 announced that Switzerland has initialed revisions of its tax treaties with Japan and the Netherlands to include a new extended administrative assistance provision based on article 26 of the OECD model tax convention and in line with the new Swiss policy regarding information exchange announced March 13. (For prior coverage, see Tax Notes Int’l, Mar. 30, 2009, p. 1189, Doc 2009-6153, or 2009 WTD 59-2; for the Swiss release regarding the Japan treaty, see Doc 2009-14682 or 2009 WTD 122-37; for the Swiss release regarding the Netherlands treaty, see Doc 2009-14683 or 2009 WTD 122-38.)
Switzerland Gets Busy With Information Exchange
The Swiss government on May 26 announced that the negotiators in charge of implementing a treaty article 26 (administrative assistance in tax matters) that fully complies with the OECD model tax convention have initialed the first three treaties that have a new, extended information exchange clause. (For related coverage, see Tax Notes Int’l, Mar. 30, 2009, p. 1189, Doc 2009-6153, or 2009 WTD 59-2.)
New Swiss VATAct as from 2010
On 12 June 2009, the Swiss Parliament passed the VAT Act reform bill on the final vote. This new legislation will completely replace the existing VAT law and brings with it significant changes in key areas of VAT. Unless a referendum is called (unlikely), the new VAT Act will come into effect on 1 January 2010. This leaves businesses with only a few months to prepare for the transition.
New Swiss VAT Act as from 2010
On 12 June 2009, the Swiss Parliament passed the VAT Act reform bill on the final vote. This new legislation will completely replace the existing VAT law and brings with it significant changes in key areas of VAT. Unless a referendum is called (unlikely), the new VAT Act will come into effect on 1 January 2010. This leaves businesses with only a few months to prepare for the transition.
Alps, Banks, Chocolate and Taxes in Switzerland
The Swiss ABC obviously starts with Alps, Banks and Chocolate, but the country also carefully built up an excellent reputation in the field of taxation. As a result, for many decades already, Switzerland is a very attractive location for multinational enterprises. In the last few years, especially global or regional headquarters and principal companies showed an ever increasing interest in Switzerland.
Revised Swiss Guideline under the Wealth Tax for the Valuation of Securities without Market Prices
The Swiss Tax Conference (Schweizerische Steuerkonferenz [SSK]) published Circular Letter No. 28 in August 2008, on the basis of which the Guideline under the Wealth Tax for the Valuation of Securities without Securities Exchange Market Prices has been revised. The old guideline was issued in 1995. While it was modified only slightly in 2006, the 2008 guideline includes some important changes which could lead to a tripling of the wealth tax.
TAX UPDATE SWITZERLAND
As at beginning 2009 the fi rst set of statutory changes related to the corporate tax reform II (the “Reform”) will be enacted. The Reform extends the so called corporate tax reform I of 1998 which, among other things, eased the taxation of holding structures and abolished tax on equity at federal level.
New and Revised Swiss VAT Publications
The Swiss Federal Tax Administration (SFTA) has recently published revised versions of its administrative Value Added Tax (VAT) guidance to taxable persons. The new guidance comprises the VAT Guide, six Special Brochures, 24 Business Guides, and 17 VAT Information Sheets – all in all, not less than 2,500 pages.
The New Swiss Emissions Trading Scheme
The Swiss emissions trading scheme (Schweizer Emissionshandelssystem; “Swiss ETS”) was launched on 1 January 2008, allowing Swiss businesses exempt from the CO2-tax (CO2-Abgabe) and other Swiss and foreign participants to trade CO2 emission allowances (Emissionsrechte) on a national and international basis. In order to increase market liquidity, it is intended to link the Swiss ETS to the emissions trading scheme of the European Union (“EU ETS”), the world’s largest emissions trading scheme.
Tax incentives for
Presented by STEFAN WIDMER and RETO ARNOLD, certified tax experts at VISCHER Zurich
Foreign investors considering the purchase of a Swiss company very often come across a specific particularity of Swiss tax law that in many cases complicates matters significantly.
VISCHER Attorneys at Law
Schuetzengasse 1, PO Box 6139
CH-8023 Zurich, Switzerland
Tel + 41 44 254 34 00
Fax + 41 44 254 34 10
E-mail info@vischer.com
Website www.vischer.com
Tax simplifications for M&A transactions - Switzerland
Foreign investors considering the purchase of a Swiss company very often come across a specific particularity of Swiss tax law that in many cases complicates matters significantly. An important issue that foreign investors may be unaware of is the fact that the owner of the target company, if he is an individual, wants to make sure he realizes a tax-free capital gain upon the sale of his company. Whether he achieves this goal or whether the capital gain realized is re-qualified as taxable dividend income in application of the socalled indirect partial liquidation theory depends heavily on the post-acquisition actions taken by the purchaser of the company.
Ratification of the Hague Trusts Convention
On July 1st, 2007 the Convention on the Law Applicable to Trusts and on their Recognition (Hague Trusts Convention) has come into force. Related to this event several modifications have been made in Swiss law. The recognition of the Convention means that certain rules on the conflict of laws and on the law applicable to trusts have been introduced and the issue of the acknowledgement of a trust has now been settled. However, this does not mean that the convention has introduced the trust as a legal institution into the Swiss legal system. In fact, the jurisdiciton of the Federal High Court has already some years ago recognised the elementary principles of a trust. The Hague Trusts Convention will strengthen and simplify the applicaton of that jurisdiction and further the use of trusts as an instrument of asset management in Switzerland.
Tax simplifications for M&A transactions - Switzerland
Foreign investors considering the purchase of a Swiss company very often come across a specific particularity of Swiss tax law that in many cases complicates matters significantly.
Purchase of a Participation and Indirect Partial Liquidation
If an individual shareholder resident in Switzerland sells shares or otherforms of equity participations in a business which were the shareholder’sprivate assets (i.e., a passive investment) and after the sale the participations become part of the business assets of the purchaser, then the sellermay be required to pay income tax on the gain realized from the sale of theparticipations if assets are thereafter removed from the business.
Verlustverrechnung, Planmässigkeit von Abschreibungen, Periodizität – ein steuerlich zu beachten
Das Bundesgericht musste kürzlich in einem Entscheid eine Reihe handelsrechtlicher und steuerlicher Grundsätze der Gewinnbemessung in Erinnerung rufen. Im Lichte dieser Prinzipien fand eine „Streckung“ der im schweizerischen Steuerrecht auf sieben Jahre begrenzten Verlustvortragsperiode mittels „Abschreibungskosmetik“ vor dem gestrengen Auge „Lausannes“ keine Gnade.
