The name is an anachronism and dates back to the time when such taxes were administered with physical stamps. From mitigating financial risk and addressing pension plans, to embedding your new workforce, we can help you effectively manage your people. In most cantons, this is a fixed deadline that cannot be extended. Taxable persons must register with the Swiss Federal Tax Administration of their own accord in writing within certain deadlines. The tariffs are generally progressive; the more you earn, the higher the tax rate. Ernst & Young Limited is a Swiss company with registered seats in Switzerland providing services to clients in Switzerland. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. In addition to individual and corporate income tax and tax on wealth or equity, there are also other taxes in Switzerland. Due to the entry into effect of TRAF on 1 January 2020 and the abolishment of the special cantonal tax regimes (e.g. Review our cookie policy for more information. supply of goods that are transported or dispatched directly abroad). Where the direct shareholder provides debt in excess of the thin capitalisation limitations but benefits from a full dividends withholding tax relief (eg, based on a double tax treaty or as Swiss resident corporation holding at least 20 per cent in the Swiss target), the withholding tax cash-out could be avoided by a proactive, timely notification of the hidden dividend distribution. It’s a consumption tax levied at a rate of 7.7% on most commercial exchanges of goods and services. There are exceptions; for example, if the acquired company has already been brought into liquid form and has no commercial activity any more. Such hidden equity is subject to annual capital tax; it is, however, not subject to a 1 per cent stamp duty on equity contributions. Other tax attributes are principally also not affected by a change of control. Some cantons have additional criteria in their tax laws that require an ordinary tax assessment of foreign residents in Switzerland (e.g., owning real estate). As Switzerland has a broad treaty network, no CFC rules, an attractive income tax regime and usually offers possibilities to structure around potential tax inefficiencies, a Swiss acquisition company is often preferable. There is a reduced tax scale for married couples living together and single-parent families. It is important to note that Swiss tax laws are based on the principle that income and wealth of a family represents an economic unit and is taxed together. Please try again. A reduced rate of 2.5% applies on certain goods (e.g. In some cantons, it is levied by the communes. An international comparison shows that Switzerland is a very attractive location for corporate taxpayers. Tax exemptions can be available for specific transactions or securities, or for specific parties ("exempt investors").If the tax exemption applies because of the nature of the transaction or security, no Swiss securities transfer tax is levied at all. Interest payments in general are tax-deductible and not subject to Swiss withholding tax at the level of a Swiss acquisition company. Only taxable turnover in Switzerland is in this threshold. In the case of a share deal, the target company remains entitled to its tax loss carry-forward, if any, and can set it off against taxable profit during the ordinary tax loss carry-forward period of seven years (see question 7 regarding the impact on tax attributes). Swiss resident corporations or individuals holding the shares of the target company as business assets may be able to roll over their tax basis in the target company shares into the shares of the acquisition company provided the book values are carried on.

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