In September 2014, the Swiss Federal Government launched a consultation on a third series of Corporate Tax Reforms, which are designed to abolish the current cantonal special tax regimes and replace them with new tax incentives for all Swiss resident companies. Aimed at enhancing Switzerland’s appeal as a favourable tax location for international business, the Tax Reform will also bring Switzerland in line with internationally accepted tax standards.
The new tax incentives would introduce a series of measures, including:
- An IP Box regime for privileged taxation of royalties;
- An allowance for corporate equity, which would reduce the taxable income of Swiss resident companies through an additional interest deduction on equity;
- A reduction in cantonal capital tax rates;
- Favourable asset valuation for companies relocating to Switzerland, allowing for tax optimisation opportunities; and
- The abolition of 1% Swiss issuance stamp duty on issuance and increase of share capital and additional paid-in contributions.
The Reform is under consultation until 31 January 2015, and no particular action is required until the Reform is adopted, which should be no earlier than 2017. Once the Reform has been adopted, Swiss resident companies should seek tax advice to determine the impact on their own situation and the necessary changes they need to make to their existing tax rulings. Until that time, Swiss resident companies can continue to benefit from the existing cantonal special tax regimes, provided they fulfil the necessary requirements.
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