Tax and Legal blog
Stay up to date with the latest tax and legal issues and developments that may affect you and your business.
The future of remote working: Remote work / Cross border commuters - Extension of flexible Social Security approach until 31 December 2021, expansion to all European Economic Area countries and Switzerland
The Swiss social security administration has communicated that the current “flexible approach” in regards to maintaining ordinary cross-border commuters (who have been having to work from home) in the Swiss social security and pension system will continue to be valid until the 31 December 2021. Further, the social security authorities of the European Economic Area confirmed the expansion of this approach to all the EEA countries and Switzerland.
The future of remote working: Remote work / Cross border commuters - Extension of flexible Social Security approach until 31 December 2021
Introduction of exemptions from the negative PCR test and quarantine requirement as of June 2021
As per our latest tax blog the general rule is that anyone who has been in a country or area with an increased risk of infection must go into quarantine in Switzerland. However, various groups of people are exempt from the quarantine requirement as well as the obligation to present a negative test result at the Swiss border.
Public Country-by-Country Reporting (CbCR): Corporations in the EU will have to disclose their profits and taxes in future & the US parliament puts forward a similar proposal
On Tuesday evening of last week, negotiators from the EU states and the European Parliament reached a preliminary agreement on the core of the new directive on “Public Country-by-Country Reporting”. The final approval of the Parliament and the Council of Ministers is considered a formality.
Similarly, on 12 May, the US parliament had brought forward a proposal that would direct the Securities and Exchange Commission (SEC) to require large publicly traded corporations to disclose certain tax and non-tax information on a country-by-country basis.
A Proposed Tax Hike Under President Joe Biden?
After passing the $1.9 trillion COVID-19 relief package through Congress, President Biden’s attention has now shifted to his tax legislative agenda. During the election campaign, President Biden proposed that tax revenue should increase by $2.65 trillion over the next decade with 6.5% less after-tax income for the top 1% of taxpayers. The focus was on raising taxes on labour, investment and business income for those earning over $400,000 and an increased payroll tax for the wealthy. With Democrats now controlling the House and Senate, President Biden recently proposed the American Jobs Plan and the American Families Plan which target investments in children, families and the economic future of the USA. The full revenue proposals released by the Department of the Treasury can be found at: General Explanations of the Administration's Fiscal Year 2022 Revenue Proposals (treasury.gov). President Biden would need to fund these proposals, so what financial impact could this have on U.S. individuals, employers and businesses?
Financial Services Industry Tax Webinar on 2 June 2021: VAT updates, withholding tax reform & transfer pricing developments
We would like to invite you to our next Financial Services industry webinar on Wednesday, 2 June at 09.00am (CET) where we will discuss recent tax developments relevant to the Swiss FS industry.
How tax authorities use the data received under the Automatic Exchange of Information (AEOI) – An Italian example
Tax authorities around the globe are making use of the financial account information they receive through the AEOI regime based on the OECD Common Reporting Standard (CRS); Italy is no exception. The Italian Tax Authorities (ITA) are using the gigabytes of AEOI data collected to confront certain taxpayers who have presumably omitted and/or only partially fulfilled their tax settlement and reporting obligations. Consequently, the ITA are issuing letters of compliance to certain taxpayers with respect to financial assets held abroad in 2017 (and any related income), which encourage them to take voluntary remediation action to meet their obligations. Notably these letters now specifically refer to assets held in Switzerland. The letters aim at highlighting discrepancies between the data taxpayers have filed in their tax return and the data the ITA received through the AEOI mechanism. Such discrepancies do not necessarily reflect taxpayer mistakes as there may well be differences between the AEOI data and the information captured on tax returns. That being said, recipients of compliance letters are strongly recommended to proactively engage with the ITA to clarify their situation, which may mitigate the risk of further inquiries.
Provisional COVID Cross-Border Tax Agreement with Germany: Update
On 27 April, the Swiss government announced that the Provisional Agreement of 11 June 2020 between Switzerland and Germany regarding the taxation of cross-border employees during the COVID-19 pandemic has been further extended until at least 30 June 2021. Additionally, the agreement states that working from home because of the pandemic does not automatically imply the creation of a permanent establishment.
Automatic conversion of bearer shares into registered shares from 1 May 2021
From 1 May 2021, bearer shares (with just some exceptions) will be automatically converted into registered shares by the Federal Office of Commercial Register unless the companies have already converted on a voluntary basis their bearer shares and thus modified their articles of association by this date. In addition, holders of bearer shares must inform the company about their bearer shares by the end of April 2021 if they have not already done so. After this date, shareholders will have to apply to the court to have their shares registered.
Short-time working compensation scheme: Recent changes and future prospects
The short-time working compensation scheme has so far been an important response to the negative consequences of the COVID-19 pandemic. The Federal Council has taken various measures to ensure that as many companies and employees as possible benefit from short-time working compensation, for example by extending the scheme to additional categories of employees. The measures have now partly been changed again with a few new rules applying as from 1 April 2021. In this blog, we give an overview of what the current rules are and how these will change in the future (status: 1 April 2021).
EU VAT - Financial services – Danske Bank A/S v Skatteverket (C-812/19)
In the case C-812/19 Danske Bank A/S v Skatteverket (Danske), the Court of Justice of the European Union (CJEU) has held that the Danish VAT group head office is a separate taxable person to its Swedish branch for VAT purposes. The Court also commented on the territoriality of VAT groups which may affect EU Member States with a “whole legal entity” VAT grouping approach.