Tax bill 17 - Councils agree
Silvia Hunziker
The councils are in agreement on tax bill 17, and the last differences regarding the municipal article and the capital contribution principle have been resolved. An overview of the most important key points regarding tax submission 17:
Tax privileges
The internationally no longer accepted tax privileges for status companies will be abolished. The Councils are in agreement on this.
AHV
The AHV receives an additional CHF 2 billion per year. This is the estimated cost of the tax bill. Employers and employees each contribute 1.2 billion francs with 0.15 percent of wages. The Federal Treasury contributes its share of the VAT demographic percentage, which brings the AHV 520 million francs. In addition, the federal share of AHV expenditure will be increased from 19.55 to 20.2 percent. This is an additional 300 million francs.
Federal tax
The cantons' share of direct federal tax will be increased from 17 percent to 21.2 percent. The additional billion Swiss francs gives the cantons leeway to reduce the profit tax rates. Most cantons plan to make use of this option.
Community clause
The municipalities must be compensated for the effects of the corporate tax reform.
Dividends
Dividends on participations of at least 10 percent are taxed at least 70 percent by the federal government and at least 50 percent by the cantons.
Research
150 percent of the expenses for research and development in Germany can be deducted from taxes.
Patent box
In the Patentbox, the cantons can tax income from patents and comparable rights at a reduced rate. The reduction may not exceed 90 percent.
Hidden reserves
Companies that relocate their registered office to Switzerland may amortise disclosed hidden reserves over a period of 10 years. This reduces the profit tax. The hidden reserves of companies that lose their cantonal tax privileges are taxed separately.
Minimum taxation
The total relief through interest deduction, patent box, research deductions and separate taxation of hidden reserves is limited to 70 percent.
Capital contribution principle
Listed companies may now only pay out tax-free capital contribution reserves if they distribute taxable dividends in the same amount. Exceptions apply to companies that have moved in after February 24, 2008.
Interest deduction
High-tax cantons (in particular Zurich) may allow the deduction of a notional interest on excess equity. This reduces the profit tax.
Financial equalisation
The tax bill will adjust the financial equalisation between the cantons. The weighting of corporate profits in the resource potential is changed. This could lead to some cantons becoming more resource intensive and having to pay more into the fiscal equalisation system.
Capital Tax
The cantons may provide for capital tax relief.
Transposition
Anyone who sells shares in a company in which he himself owns at least 50 percent should always have to pay tax on the profit. Today, the sale of participations of less than 5 percent is tax-free.
Tax credit
Swiss permanent establishments of foreign companies may be able to claim withholding taxes on income from third countries with a lump-sum tax credit.
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