National Council wants to facilitate intra-group financing
The Federal Council should resume work on the reform of the withholding tax - with a view to tax relief for intra-group financing. This is what the National Council demands. On Wednesday he adopted a motion from his economic commission. Opponents warned of tax shortfalls.
The National Council approved the proposal by 101 votes to 75 with 8 abstentions. Now the Council of States still has to decide. The proponents are concerned about the profit tax burden.
In the winter session, the parliament had passed a change in the law that is intended to prevent the tax burden on systemically important banks from rising because they have to build up additional equity capital in connection with the "too big to fail" regulation.
Under current law, this increases the income tax burden on investment income for the group parent company because the so-called investment deduction is lower.
Facilities for all banks
In the future, the interest expense for capital procurement instruments at systemically important banks will no longer be treated as part of the financing expense, which reduces the participation deduction. Funds transferred to Group companies are excluded from the balance sheet of the Group parent company.
The National Council now wants this mechanism to apply not only to systemically important banks but to all banks, as Thomas Aeschi (SVP/ZG) explained. With a view to such a regulation, the Federal Council should push ahead with the planned reform of the withholding tax.
High tax losses
Against the advance the Ratslinke and the Mitte stood. Leo Müller (CVP/LU) warned of high tax losses. He said it was about tax relief on intra-group financing for all banks, insurance companies and industrial companies. "This is where we open the doors for further tax breaks." The parliament has recently decided several things, he said, and things cannot go on like this.
Jacqueline Badran (SP/ZH) was also annoyed by the demand. The Federal Council, on the other hand, showed itself willing to accept the initiative. However, he does not see this as a mandate for a specific regulation, as Finance Minister Ueli Maurer explained. The Federal Council sees the motion much more as a mandate for an interpretative regulation.
The reform of the withholding tax is in a waiting loop. The request is being examined in this context. This does not mean, however, that the requirement to calculate the participation deduction is then implemented in exactly the same way. "The excitement doesn't have to happen now," Maurer said to the opponents.
With the reform of the withholding tax, the Federal Council aims to improve the tax framework for group financing. However, the project is currently suspended. Last Friday, the Federal Council took note of the report of a group of experts with recommendations for the reform of the withholding tax.