Swiss voters recently approved a new corporate tax reform, which will set the basis for new rules on Swiss corporate taxation and secure and enhance Switzerland's overall attractiveness as a business location. The reform includes a patent box, an R&D super deduction and a notional interest deduction for high-tax cantons. There are also substantial non-tax (revenue-raising) measures and new provisions on social security contributions.
The Swiss Federal Tax Administration recently relaxed its practice under which bonds that are issued by foreign resident issuers, but guaranteed by their Swiss resident parent company, are requalified as domestic issuances which trigger Swiss withholding tax on interest payments. The revised rules significantly increase the permissible use of proceeds in Switzerland.
The Swiss Federal Tax Administration recently published the 2019 safe haven interest rates to be used on intra-group loans. Against this backdrop, this article provides an overview of the relevant Swiss tax rules associated with determining whether intra-group financing constitutes equity or debt for tax purposes and the consequences of each characterisation.
In the context of the bill on the Federal Act on Tax Reform and AHV Financing, the Swiss Federal Tax Administration recently announced that, as of 1 January 2019, it will abstain from granting rulings which safeguard the tax privileges of new principal companies and finance branches. Existing rulings for these regimes will no longer be valid after 1 January 2020 as part of the overall Swiss tax reform.
The Swiss Parliament has approved the revised version of Tax Proposal 17, a proposal for corporate tax reform. The new proposal aims to set the basis for new rules on Swiss corporate tax (the last proposal having been rejected in a nationwide referendum) and secure and enhance Switzerland's overall attractiveness as a business location.