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.
Date for referendum on the revision of the Withholding Tax Act
The Federal Council has set the date for the referendum on the amendment of 17 December 2021 to the Federal Act on Withholding Tax (Withholding Tax Act, ITA) (strengthening the debt capital market) for 25 September.
Maritime shipping companies should be able to be taxed on the basis of tonnage
On 4 May 2022, the Federal Council adopted the dispatch on the Federal Tonnage Tax Act.
Withholding tax: Changes to the reporting procedure in the group
At its meeting on 4 May 2022, the Federal Council approved the amendments, which will enter into force on 1 January 2023.
FTA publishes tax folder Tax relief for newly opened companies of legal entities
On 21 April 2022, the FTA published a new tax folder on the topic of "Tax relief for newly opened companies of legal entities".
Adjustment of the private share in the car costs in the leaflets N1/2007 and NL1/2007
On 22 March 2022, the FTA amended the information sheets N1/2007 and NL1/2007, as Art. 5a para. 2 of the Federal Ordinance on Professional Costs came into force on 01 January 2022, which now provides for a higher flat-rate travel cost deduction of 0.9% of the purchase price of the vehicle as monthly income.
Federal Council opens consultation on implementation of OECD/G20 minimum taxation
On 11 March 2022, the Federal Council decided that the OECD/G20 project on the taxation of the digital economy in Switzerland should be implemented in stages with a constitutional norm and transitional provisions. The corresponding consultation will last until 20 April 2022.
