Taxation of the Digital Economy - OECD Agreement on Global Tax Reform (Pillar One and Two)
137 countries of the Organization for Economic Co-operation and Development (OECD) - including Switzerland - agreed to a comprehensive global tax reform on 8 October 2021. The global tax reform aims to introduce a worldwide redistribution of profits of multinational corporations with a turnover of more than 20 billion euros (Pillar One) and a global minimum taxation of 15% for multinational corporations with a turnover of more than 750 million euros (Pillar Two). The implementation of the reform will pose major challenges for companies, but also for states. Pillar One will result in multinationals becoming taxable in a state even if they have no physical facilities such as offices or premises in that state. At least 25% of profits exceeding 10% of turnover will be taxed in the states where the turnover is generated, irrespective of the existence of a physical presence. Pillar Two will introduce a global minimum tax of 15%. The tax rate will be calculated at the state level and not at the individual company level. In addition, the calculation of the global minimum tax will be based on taxable profit and taxable net income, an international accounting standard and not local legislation, such as Swiss commercial law. This article explains how Pillar One and Two work, the currently envisaged implementation of the reform in Switzerland, its impact on global tax and location competition and on Swiss-based companies.
Collective investment schemes with real estate: Selected issues in the real estate transfer tax
Recently, various questions have arisen in practice in connection with the transfer tax for collective investment schemes with direct real estate holdings. This article examines whether the transfer of real estate from one fund management company to another and the transfer of real estate from one collective investment scheme to another triggers the transfer tax.
Charitable foundations - explosive tax law issues
Legal entities that meet the respective requirements of Art. 56 lit. e, g and h of the Federal Law on Direct Federal Tax (DBG) generally benefit from a subjective tax exemption. If legal entities are subjectively tax-exempt due to the pursuit of charitable purposes, according to Art. 56 lit. g DBG, the acquisition and management of "significant capital investments in companies" are only permitted under restrictive conditions. The Federal Supreme Court recently had to assess the question under which circumstances the holding of a significant equity interest in an operating company by a charitable foundation precludes a subjective tax exemption.
Sale of own shares - a service within the meaning of the VAT Act?
In its ruling 2C_891/2020 of 5 October 2021, the Federal Supreme Court upheld the Federal Administrative Court and decided, contrary to administrative practice, that the sale of treasury shares does not constitute a supply of services within the meaning of Art. 18 para. 1 VAT Act and is therefore outside the scope of application of VAT. This article is a brief analysis of the Federal Supreme Court's decision.
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.
Federal practices for principal companies and Swiss Finance Branches from 1 January 2019
As part of the Tax Bill and OASI Financing (STAF), the Federal Tax Administration (FTA) will no longer apply the federal practices for principal companies and Swiss Finance Branches to companies seeking to take advantage of these practices for the first time beginning in 2019.
Reform of the withholding tax
The Economic Commission of the National Council discussed further work on the parliamentary initiative 17,494 after the sister commission of the Council of States had approved its decision to follow this initiative (cf. WAK-S press release of 20 August 2018). In this context, she discussed in particular with the head of the responsible department the Federal Council's plans for reforming the withholding tax and changing from the debtor to the paying agent principle. Subject to the approval of the Office of the National Council, the commission decided by 16 votes to 8 to set up a sub-commission and to instruct it to prepare a preliminary draft for the implementation of the parliamentary initiative. The subcommittee should coordinate its work with that of the Federal Council.
Zurich: Application for cantonal SV17 implementation submitted
The Government Council of the Canton of Zurich wants to maintain and strengthen the tax competitiveness of Zurich as a business location. To this end, it submits to the Cantonal Council a tailor-made cantonal implementation draft for the cities and municipalities that is compatible with the federal tax proposal 17 (SV17). The template is of vital importance for the entire canton. According to new model calculations, the loss of income is likely to be lower than under the Corporate Tax Reform III (USR III).
Tax bill 17 - Councils agree
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:
Referendum as final hurdle for tax bill
The AHV tax deal stands. The Council of States has resolved the last differences. Tax bill 17 is thus ready for the final vote at the end of the autumn session.
Parliament revises revised withholding tax law
With the revised Withholding Tax Act, claims should be able to be asserted retroactively only for proceedings that have not yet been legally concluded. On Thursday the National Council resolved this last difference with the Council of States.
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.
ISIS)-Seminar folder "Taxation of shareholder and company in personal companies" (2023)
Case studies, detailed solution notes and slides: Here you will receive all documents of the individual workshops according to the following content description from the ISIS)-Seminar "Taxation of Shareholder and Company at Personally Owned Businesses" from September 18 - 19, 2023 under the direction of Andrea Opel.
Social security aspects in personal companies
Workshop on "Social Security Aspects in Personally Owned Companies" by Petra Caminada and Moritz Seiler on the occasion of the ISIS seminar "Taxation of Shareholder and Company in Personally Owned Companies", September 18-19, 2023.
Reclassification of capital gain as taxable capital income
Workshop on "Reclassification of capital gain from sale into taxable capital gain" by Thomas Wolfensberger and Marco Buchmann on the occasion of the ISIS seminar "Taxation of Shareholder and Company in Personally Owned Businesses" on September 18 - 19, 2023.
