Tax Package 17: Federal Council presents basic parameters of the planned reform

At its meeting on 9 June 2017 the Federal Council confirmed the basic parameters of the planned reform of Swiss corporate taxes, which the Steering Committee sent as a recommendation to the Federal Council and already introduced in a press release on 1 June 2017. The Tax Package 17 (SV 17) has three main objectives: first the aim is to secure Switzerland’s attractive status as a business location. In addition the reform intends, in view of the changed international environment, also to continue to preserve the acceptance of the Swiss tax system. Finally SV 17 is intended to secure sufficient tax revenues at all levels. These objectives are in principle identical with those of Corporate Tax Reform III (CTR III), which was rejected by the Swiss voters on 12 February 2017 with a share of the vote of almost 60%. SV 17 will therefore be more balanced. Compared with CTR III the special rules will be drawn up more restrictively and the interests of the cities and communes will carry more weight.

Continue to read in detail in our current newsletter.

If you have questions, please contact your usual PwC contact person or one of PwC Switzerland´s experts named below.

Contacts

Andreas Staubli
Partner
Leader TLS Schweiz
Tel. +41 58 792 44 72
Send E-mail
Armin Marti
Partner
Leader CT Schweiz
Tel. +41 58 792 43 43
Send E-mail
Benjamin Koch
Partner
Leader TP and VCT
+41 58 792 43 34
Send E-mail
Daniel Gremaud
Partner
Tax & Legal
+41 58 792 81 23
Send E-mail
Claude-Alain Barke
Partner
Tax & Legal
+41 58 792 83 17
Send E-mail
Remo Küttel
Partner
Tax & Legal
+41 58 792 68 69
Send E-mail
Laurenz Schneider
Director
Tax & Legal
+41 58 792 59 38
Send E-mail

Switzerland publishes recommendations for new corporate tax proposal 17

After rejection by popular vote of the Swiss corporate tax reform III (CTR III) package in February 2017, a Swiss governmental working group comprised of federal and cantonal members (the steering body) has been working on a revised package (tax proposal 17).

The steering body on June 1, 2017, published its recommended contents for tax proposal 17. The Federal Council now will consider the draft proposal and is expected to publish a final proposal for consultation by end of June 2017. Thereafter, parlamentary discussions are expected to start in spring 2018 and entry into force is expected to take effect January 1, 2020.

Continue to read in detail in our current newsletter.

If you have questions, please contact your usual PwC contact person or one of PwC Switzerland´s experts named below.

Contacts

Andreas Staubli
Partner
Leader TLS Schweiz
Tel. +41 58 792 44 72
Send E-mail
Armin Marti
Partner
Leader CT Schweiz
Tel. +41 58 792 43 43
Send E-mail
Benjamin Koch
Partner
Leader TP and VCT
+41 58 792 43 34
Send E-mail
Daniel Gremaud
Partner
Tax & Legal
+41 58 792 81 23
Send E-mail
Claude-Alain Barke
Partner
Tax & Legal
+41 58 792 83 17
Send E-mail
Remo Küttel
Partner
Tax & Legal
+41 58 792 68 69
Send E-mail
Laurenz Schneider
Director
Tax & Legal
+41 58 792 59 38
Send E-mail

Tax Forum 2016

In taxes, just as in sailing, setting the right course is the deciding factor. Set your course for new fiscal seas with us!

At the tax forum, our tax navigation crew will use their know-how to show you how to proceed in stormy seas and how to prepare yourself accordingly. You will have the opportunity to discuss with our experts and other participants as well as to test your “seaworthiness” in relation to current and local tax issues.

Location and Date:

Aarau, 16.11.2016
Basel, 17.11.2016
Bern, 23.11.2016
Chur, 8.11.2016
Fribourg, 17.11.2016
Geneva, 15.11.2016
Lausanne, 22.11.2016
Lugano, 24.11.2016
Lucerne, 17.11.2016
Neuchâtel, 23.11.2016
Sion, 9.11.2016
Solothurn, 17.11.2016
St. Gallen, 15.11.2016
Thun, 9.11.2016
Winterthur, 22.11.2016
Zug, 23.11.2016
Zurich, 8.11.2016

Details:
16.30 to 18.10 Uhr, followed by an aperitif.

Costs:

This event is free of charge.

Online registration

Please visit our website for more information.

The board: duty calls

The international tax landscape in flux: what a member of the board needs to know

This brochure is designed to help you as you steer your organisation through a complex tax landscape.

With growing calls for transparency and tax justice vying with the demands of intense tax competition, the Swiss economy and the players within it face major challenges. In this brochure we review the most important tax developments in Switzerland and internationally and summarise those we consider to be very relevant for a member of the board.

We wish you stimulating reading!

Access the brochure here

6th Zurich Regional and Global Headquarters Conference

Switzerland – resilience and stability amongst uncertainty and geopolitical turmoil

As we go to press with this year’s invitation, the global business and geopolitical environment has become significantly less certain. With the UK and the rest of the world attempting to come to terms with the implications of the UK voting to leave the EU, business is facing a significant period of uncertainty that requires a calm and measured response to a volatile and turbulent environment. Add to this the changes articulated by the OECD’s BEPS project that are starting to enter into legislative force the debate around the impact that migration has upon economies and the prospect of increased use of robotics in the working environment and beyond … the only certainty is that there will be uncertainty in the future.

In our conference, we will attempt to address these issues and how Switzerland fits into this environment. With Switzerland’s relative political and fiscal certainty it has the opportunity to provide an increasingly attractive platform from which to navigate a route through the ongoing turmoil.

With presentations from Martin Naville, CEO of the Swiss-American Chamber of Commerce and Dr. Johan Rochel, Vice President of the Swiss Forum on Foreign Policy (foraus), we’ll be contrasting Switzerland with other nations and hearing where this country stands in terms of the political environment and developments on immigration.

Online registration

Please find the full programme here.

Date: Wednesday, 05.10.2016

Time: 8.15am to 3.15pm, with a networking lunch

Location: Kameha Grand Zurich

Swiss parliament passes final corporate tax reform package to enhance global competitiveness

In brief
The Swiss parliament on June 17, 2016, following several back and forth debates, passed the final corporate tax reform package (CTR III) to strengthen Switzerland’s competitiveness as business location. CTR III includes several notable tax reform measures related to federal and cantonal tax laws, included expected reductions to certain cantonal tax rates.

 

Read the decisions of the National Council in detail in our current newsletter.

 

Next steps
The Federal Council determines when the reform measures will take effect. However, the referendum period of 100 days is first to be passed after the official publication of the legislation. If no referendum is requested, certain federal tax measures in CTR III could go into effect as early as the beginning of 2017. The cantons must then separately pass the measures related to the tax harmonization law as part of their cantonal tax legislation. Cantonal legislation changes, and any decision to reduce the cantonal corporate tax rate, would require additional approval by the cantonal electorate in case cantonal referendum would be requested as well.

A referendum opposing the federal government’s CTR III bill seems likely, as repeatedly announced by the country’s left parties. The cantonal electorate would likely have to vote on the bill in February 2017. In the event of a passing vote, the reform could take effect effective at the federal and cantonal levels starting in 2019.

The takeaway
Passage of CTR III marks an important milestone in Swiss tax legislation. Subject to approval by the Swiss electorate and subsequent implementation in the cantons, Switzerland will have an internationally recognized corporate tax system. The period of uncertainty is herewith ended and Switzerland can offer a stable tax and legal system outlook. The reform will have both, winners and losers. Switzerland will continue to have an internationally competitive federal tax system, independent of the decisions made by the cantons. Using the building blocks available under CTR III, each canton can design its own rules, tailored to its particular circumstances and requirements. However, inter-cantonal tax competitiveness is likely to increase due to diverging cantonal income tax rates.

Overall, CTR III’s reform measures are expected to keep Switzerland competitive globally for MNEs operating and domiciled in the country.

Despite maintaining tax-related location competitiveness in international comparison, the big winners of the reform will, however, be the Swiss SMEs. They will be able to benefit the most from the envisaged relief with the patent box, the R&D special deduction, the NID and the cantonal reductions in corporate income tax. The increase in partial taxation, as far as the cantons envisage this in connection with the introduction of the NID, should be bearable for entrepreneurs, as the overall burden for SME owners should not increase if one sets off the lower burden at company level against the additional burden at ownership level.

The reform is of pivotal importance for the medium- and long-term future of Switzerland. This awareness should be considered within the scope of the referendum and will be the decisive factor during the national referendum which seems to be an extremely likely possibility.

Corporate Tax Reform Act III from June 17, 2016

If you have questions, please contact your usual PwC contact person or one of PwC Switzerland´s experts in CTR III named below.

Contacts

Andreas Staubli
Partner
Leader Tax & Legal Services Schweiz
Tel. +41 58 792 44 72
andreas.staubli@ch.pwc.com
Armin Marti
Partner
Leader Corporate Tax Schweiz
Tel. +41 58 792 43 43
armin.marti@ch.pwc.com
Benjamin Koch
Partner
Leader Transfer Pricing and Value Chain Transformation
+41 58 792 43 34
benjamin.koch@ch.pwc.com
Daniel Gremaud
Partner
Leader Tax & Legal Romandie
+41 58 792 81 23
daniel.gremaud@ch.pwc.com
Claude-Alain Barke
Partner
Tax & Legal Romandie
+41 58 792 83 17
claude-alain.barke@ch.pwc.com
Remo Küttel
Director
Tax & Legal
+41 58 792 68 69
remo.kuettel@ch.pwc.com
Laurenz Schneider
Director
Corporate Tax
+41 58 792 59 38
laurenz.schneider@ch.pwc.com

PwC Webinar: Final decision of Corporate Tax Reform III

Swiss companies and businesses will be significantly impacted by the new tax rules. At the PwC webinar we provide an update on the final CTR III package and answer questions such as:

  • What are the impacts for Swiss companies?
  • Which changes did the Parliament introduce?
  • What elements survived and what surprises does it hold?
  • And what are the next steps that lie ahead?

These and other questions are addressed during our webinar.

To access the webinar (via PC or Mobile device) – click on the following link to open the recording of the webcast:

Online recording

The presentation can be downloaded here:

Presentation

 

Speakers of this webcast

Armin Marti, Partner
Leader Corporate Tax and Member of the Working Group CTRIII
+41 58 792 43 43
armin.marti@ch.pwc.com

Claude-Alain Barke, Partner
Tax & Legal
+41 58 792 83 17
claude-alain.barke@ch.pwc.com

Benjamin Koch, Partner
Leader Transfer Pricing and Value Chain Transformation
+41 58 792 43 34
benjamin.koch@ch.pwc.com

 

We look forward to welcoming you online.

Tax Technical Course 2016

PwC_PC_France_Paris_MB_080

We are pleased to announce the launch of our Tax Technical course for tax and finance professionals in Zurich.

Switzerland has a unique tax system involving tax authorities at both the cantonal and federal levels. This can make it difficult to compare your interactions with Swiss tax authorities to your interactions with tax authorities in other jurisdictions.

Our Tax Technical Course consists of six modules designed to help you learn more about the Swiss tax system and how to deal with the Swiss tax authorities. You can participate in as many modules as you wish. All the modules are held in English and moderated by experts at PwC.

Each course will be followed by an apéro to give you a further opportunity to discuss specific concerns and questions and share experiences. Whether you are a tax manager, an accountant or a financial director, our Tax Technical Course is designed to increase your awareness of the Swiss tax opportunities and risks impacting your business.

We very much look forward to meeting you for what promises to be a series of insightful and interactive sessions.

Dates & modules:
Each module will take place from 1.30 to 5.30 pm and will be followed by an apéro.

  • Module 1: Swiss tax system / CTR III / Special tax regimes
    Thursday, 2 June 2016
  • Module 2: International and intercantonal tax allocation
    Thursday, 30 June 2016
  • Module 3: Withholding tax / stamp duty
    Thursday, 25 August 2016
  • Module 4: Corporate restructuring
    Thursday, 22 September 2016
  • Module 5: Swiss VAT
    Thursday, 27 October 2016
  • Module 6: Tax administration / compliance, litigation and procedures
    Thursday, 17 November 2016

 

Register now for the module(s) of your choice!

Online registration

 

Venue:
Swissôtel Zurich, Schulstrasse 44, 8050 Zürich

Participation fee:
CHF 500 (incl. VAT) per module or CHF 2500 (incl. VAT) for the 6 modules

Full programme available here.

 

CTR III VD

In September 2015, the modification of the Vaud income tax law (“LI”) has been voted by a large majority of the cantonal Parliament. Following said vote, two extreme left-wing parties launched a referendum against the revised bill. Last week end, the amendments of the bill have been approved by a surpringly vast majority of the voters (87% in favor of the new law).

The elements disclosed in the package that has been accepted can be summarized as follows:

1. Taxation of corporations

  • Abolishment of all privileged tax regimes granted at cantonal / communal level – i.e. mixed company tax regime as well as the holding tax status (provided in art.108, 109 LI). The abolishment of the articles will be effective as from January 1st 2019 onwards;
  • General reduction of the corporate income tax rate applicable at cantonal / communal level. The new rate will lead to a global effective tax rate (including federal, cantonal and communal levels), from January 1st 2019 onwards, of 13.79%;
  • Adaptation of the tax rates applicable to the “minimum tax” (art, 126 LI);
  • Harmonization of the capital tax. Regardless of the type of taxation applied to a company located in the canton of Vaud (art 118 LI), such entity will pay capital tax on the taxable equity at a rate of 0.06% to which communal multiplier will be applied (in general ranging from 2 to 2.5). The possibility to credit on the equity tax the income tax remains possible. This measure will enter into force from January 1st 2016 onwards.

2. Taxation of individuals

  • Rental values determination (deemed income for individuals owning real estate): modification of the lump sum deduction (increase from 20% to 30%) applicable to real estate aged over 20 years. The aim of this measure is to reduce the taxable amount resulting from owning real estate for a long period of time (measure aimed for retired persons to whom rental values represent an important income tax burden);
  • Increase of the lump sum deduction for health, life and accident insurance;

3. Taxation of individual who have the right to benefit from lump-sum taxation

Modification of the lump sum taxation principles as per the modifications voted at federal level. Such taxation principle is applied to non-Swiss resident who do not carry out any lucrative activities in Switzerland. Modifications are as follows:

  • Such regime will not be granted to persons with a Swiss passport. In the past, this was possible for a Swiss citizen to be married to a foreigner who was taking profit of this privileged tax regime and be granted with said regime. It was also possible to request such type of taxation regime for a Swiss citizen returning from abroad to Switzerland in the course of the first fiscal year following the return;
  • Requirements for the lump sum taxation will have to be met by both spouses;
  • Minimal lump sum amount to be determined as follows (maximal amount of the three values mentioned below and will be provided in art 15, al.3 LI):
    – CHF 400’000 of taxable basis;
    – 7 times the rental values of real estate owned;
    – 3 times the costs of lodging – amounts paid for living.
  • From January 1st 2016 onwards, lump sum taxation will also have to cover the wealth tax due by a lump sum taxpayer on its wealth attributable to Switzerland. In the canton of Vaud, it results in an increase of the minimal lump sum amount to CHF 415’000. If the determination as per the rental value or the lodging costs lead to a higher amount, percentage applied on such value or on such costs will be used to reflect wealth tax value in the determination of the lump sum amount.

4. Modification applicable to both corporations and individuals (admin matters only)

  • Payment of the taxes due. The system will be modified for corporations to align it on the one applied to individuals (monthly payment of corporate income tax amount – applicable for FY16 onwards);
  • Formal modifications of the Vaud tax law in order to reflect latest adjustments of the Swiss commercial code – formal requirements regarding the presentation of the financial statements of a company, etc.

5. Further modifications

The above mentioned bill does not include all elements currently under discussion at the federal level (Patent Box, Notional interest deduction, step-up mechanism). However, please note that there will be a transition clause that in case Vaud tax law has not legalized the step up, which will set up tax treatment of hidden reserves after abolishment of special regimes, or other federal tax reform elements into its Cantonal law as per 1 January 2019. Such transition clause will ensure that the introduction of the reduced tax rate and abolishment of special regimes as per 1 January 2019 in Vaud is aligned to the benefits to be introduced by federal tax reform timing wise.

A complete summary of parliamentary debates can be found on PWC newsletter.

Recent Developments – The decisions of the National Council

CTR_III_EN_MarchIntroduction
After in February 2016 the Economic Committee of the National Council (WAK-N) had set the parameters for Corporate Tax Reform III, on 16/17 March 2016 the National Council (NC) discussed the bill.
The matters resolved by the NC are predominantly identical with the positions taken by the National Council Committee (refer to our News Alert with the results of the WAK-N here).

Decisions of the National Council
Read the decisions of the National Council on the Federal Law on fiscal measures to strengthen the competitiveness of the business location Switzerland ( short Corporate Tax Reform III ) in our current newsletter.

The next steps
The reform package now goes back to the Council of States, which will deliberate on the remaining differences in the summer session. If significant differences were to remain between the two councils, the reform would again be passed to the National Council for further reconcilement in the autumn session. Otherwise the final vote could be held already in summer. Provided that a referendum were not called against it, the CTR III could in that case come into force as early as 2017 and the required implementation in the cantons as early as 2019.

If you have questions, please contact your usual PwC contact person or one of PwC Switzerland´s experts in CTR III named below.

Contacts

Andreas Staubli
Partner
Leader Tax & Legal Services Schweiz
Tel. +41 58 792 44 72
andreas.staubli@ch.pwc.com
Armin Marti
Partner
Leader Corporate Tax Schweiz
Tel. +41 58 792 43 43
armin.marti@ch.pwc.com
Benjamin Koch
Partner
Leader Transfer Pricing and Value Chain Transformation
+41 58 792 43 34
benjamin.koch@ch.pwc.com
Daniel Gremaud
Partner
Leader Tax & Legal Romandie
+41 58 792 81 23
daniel.gremaud@ch.pwc.com
Claude-Alain Barke
Partner
Tax & Legal Romandie
+41 58 792 83 17
claude-alain.barke@ch.pwc.com
Remo Küttel
Director
Tax & Legal
+41 58 792 68 69
remo.kuettel@ch.pwc.com
Laurenz Schneider
Director
Corporate Tax
+41 58 792 59 38
laurenz.schneider@ch.pwc.com