Companies should be allowed to deduct fines from taxes

The National Council decided on 18 September 2018 to follow the majority of its commission. According to this, domestic sanctions and fines will not be tax deductible. However, foreign sanctions and fines will be tax-deductible, provided they meet certain conditions. This is the case if they violate the Swiss public order, if they sanction an act that would not be sanctionable in Switzerland, and if they exceed the maximum amount imposed by Swiss law for the violation in question. The Council also extended the deductibility of damages.

The advocates of this regulation want to take account of the fact that buses spoken abroad can also contain arbitrary and politically motivated components. With this regulation, the policy of Switzerland and its companies will be strengthened, said Thomas Matter (SVP/ZH). Christian Lüscher (FDP/GE) pointed out that companies are exposed abroad. Hans-Peter Portmann (FDP/ZH) spoke of an "economic war" that was also being fought by means of buses.

The SP, CVP and BDP supported the version of the Council of States and the Federal Council. According to this, companies should not be allowed to deduct fines and sanctions with a punitive purpose from taxes - regardless of whether they were imposed in Switzerland or abroad. The companies concerned must be prepared to accept responsibility for risks taken abroad rather than blaming the general public, the proponents of this solution argued. Swiss banks had acted illegally and were fined millions, noted Susanne Leutenegger Oberholzer (SP/BL). "Should the taxpayers bleed for it? Ask your voters." The commission proposed a "perverse" regulation, which was legally and morally untenable. Ada Marra (SP/VD) stated that the majority of the Commission wanted to pass a law based on the principle "privatise profits, socialise losses".

Finance Minister Ueli Maurer warned that the National Council regulation was not practicable. It was beyond the capabilities of the tax authorities. The tax authorities would have to analyse foreign law and compare it with domestic law. In addition, the regulation could lead to international problems because different laws are applied to domestic and foreign buses.

But the Council followed the Federal Council and the Commission minority on only one point. It refrained from deleting the clause according to which expenses incurred to enable crimes to be committed or in return for the commission of crimes cannot be deducted. Leo Müller (CVP/LU) warned that without the clause, wages paid to criminals and funds used to finance terrorism could be deducted from taxes. "This is not possible at all. The majority of the commission that wanted to delete the clause argued that the provision was simply not necessary. However, after Finance Minister Ueli Maurer had contradicted this, the Council voted 182 to 0 in favour of the clause. A few undecided people switched from "green" to "red" at the last moment. The bill is now going back to the Council of States.

At present, there is no explicit regulation on whether or not companies can deduct fines, penalties and financial administrative sanctions with a punitive purpose from taxes. In addition, the practice in the cantons differs. In order to eliminate the legal uncertainties, parliament instructed the Federal Council to draw up a legal regulation. In the meantime, a Federal Supreme Court ruling has also been issued. In the case of a European competition fine, the court ruled that financial penalties with a punitive purpose are not tax-deductible under current law.

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