Implementation of the STAF in the Canton of Zurich
Although the Canton of Zurich dealt with the implementation of the Federal Law on Tax Reform and OASI Financing ("STAF") at an early stage and issued various practice notes, various implementation issues still arose in the months following its entry into force. This article deals with the current implementation practice of STAF in the Canton of Zurich, with a focus on the change of status and deductions for self-financing. The practical application of the patent box and the research and development deduction is still subject to announcements by the Zurich tax office.
Implementation of the STAF in the Canton of Ticino
On 1 January 2020, the Federal Act on Tax Reform and Financing of the OASI (STAF) (Riforma fiscale e finanziamento dell'AVS, RFFA) entered into force. Among other things, the federal law modified certain provisions of the Federal Direct Tax Act (DBG) and the Direct Tax Harmonisation Act (StHG). In doing so, the Confederation leaves the cantons some leeway in implementing the STAF in their own tax legislation. This article analyses the implementation of the STAF by the Canton of Ticino.
Implementation of the Federal Law on Tax Reform and OASI Financing (STAF) in the Canton of Berne
Based on the Corporate Tax Reform Act III (USR III) passed by the Federal Parliament on 17 June 2016, the Berne Cantonal Government Council expressed its views on the content of USR III at the end of November 2016, as well as the possible effects on the Canton of Berne and the preliminary positioning of the Canton of Berne in intercantonal tax competition. In the interests of Berne as a business location, the Government Council intended to cushion the abolition of cantonal tax privileges and the associated transition to ordinary taxation with replacement measures as part of the revision of the tax law in 2019. It was planned to reduce the maximum tax burden on profits from 21.64% in two steps; namely to 20.20% in 2019 and then to 18.71% in 2020. Further reductions in the profit tax rate should then have taken place with the 2021 tax law revision. In addition, the 2019 tax law revision also provided for the reduction of the applicable capital tax rate.
Amendment to the tax laws of the Cantons of Basel-Stadt and Basel-Landschaft - Tax Template 17 (SV17)
Prior to the revision of the cantonal tax law, the canton of Basel-Stadt was one of the cantons with the highest ordinary income tax rate, with an effective ordinary income tax burden of a maximum of 22.18%. Significantly lower tax rates, namely between 7.8% and around 11%, were applied to status companies. Despite this low tax rate, the share of the status companies in the canton's tax revenue from taxes on profits and capital amounted to 60%. When implementing the tax reform and AHV financing (STAF), the challenge for Basel-Stadt was therefore to reduce the ordinary profit tax rate to such an extent that the status companies do not migrate, but at the same time sufficient tax revenue can be generated. In addition, it was assumed - probably rightly so - that it was crucial to create legal certainty for the companies concerned as soon as possible, which is why the new tax rate was communicated very early on and the reduced tax rate came into force on 1 January 2019.
Compensation paid by Swiss companies to foreign directors
This video provides information on the possible tax and social security implications of a board of directors resident in an EU country in the case of a Swiss company limited by shares if the board of directors is also self-employed in its country of residence.
Companies should be allowed to deduct fines from taxes
According to the National Council, companies should be allowed to deduct foreign fines and penalties from taxes under certain conditions. The Federal Council and the Council of States had decided otherwise.
Calculation of the participation deduction for too-big-to-fail instruments
On 20 September 2018, the National Council discussed the dispatch on the Federal Act of 14 February 2018 on the calculation of the participation deduction for too-big-to-fail instruments and approved the Federal Council's draft.
New VAT regulation Online shopping abroad could become more expensive from 2019
The Federal Council has decided that mail order companies with a turnover of at least CHF 100,000 in Switzerland must pay VAT. Foreign online merchants today do not have to pay VAT on small consignments with a tax amount of less than five francs. For Swiss mail order companies, however, different rules apply: The consignments are subject to VAT if the company is entered in the VAT register. From 1 January 2019, this unequal treatment will cease.
Federal Council adopts dispatch on the BEPS Convention
On 22 August 2018, the Federal Council adopted the dispatch on the multilateral agreement on the implementation of measures to prevent base erosion and profit shifting (BEPS). The message was referred to the Federal Councils.
WAK-S: Withholding tax
The commission agreed by 6 votes to 4 with 1 abstention to the decision to follow the commission initiative of its National Council sister commission 17,494.
Tax deductibility of fines under certain conditions
For the second time, the WAK-N dealt with the tax treatment of financial penalties (16,076). It proposes by 13 votes to 12 that fines and penalties imposed abroad should be tax deductible under certain conditions.
Tax bill 17 - the WAK-N on course for the Council of States
The Committee for Economic Affairs and Taxes of the National Council (WAK-N) has begun detailed consultations on tax bill 17 (18,031) and has taken decisions on a number of key issues. So far, it has followed the Council of States in all points, including social compensation via the AHV and dividend taxation. The detailed discussion will be concluded at the meeting on 3 September.
Simultaneous dividend booking in group relationships
The Swiss Accounting and Reporting Manual allows a domestic parent company to recognize the investment income of its subsidiary (i.e. its dividend declared in financial year n+1) as income on a deferred basis in the financial year in which the subsidiary earned it. If the parent company makes the final booking of this income to the income statement at the time of distribution of the dividend, this constitutes proper booking for the purposes of the refund of the withholding tax and for the implementation of the reporting procedure.
Asset deal versus share deal for corporations
Workshop on the occasion of the ISIS) seminar on 23 November 2017.
