On May 19, 2019 the Swiss public voted to adopt the Federal Act on Tax Reform and AHV Financing (“TRAF”) confirming the reform of corporate taxation in Switzerland.
The EXPERT Suisse published a Q&A on July 2, 2019 related to the IFRS tax accounting implications of the reform. For companies reporting under IFRS, we recommend reviewing the Q&A to for guidance on the impact, including re-measurement of the deferred taxes and potential disclosures in their 2019 Financial Statements which may already be applicable.

TRAF will have several consequences including a change of the federal tax harmonization law, which defines a general framework providing mandatory and/or optional guidance on provisions in the cantonal tax laws for income and capital taxes.

The Q&A covers among others the following topics:

• When the TRAF is substantially enacted for IAS 12 purposes given the specificity of the Swiss tax law and their interplay between the federal and cantonal tax laws.
•  The tax accounting consequences of the abolishment of special tax regime and their related transitional measures (‘current law’ step up and dual rate approach step up)
• The R&D incentive, Notional interest deduction and the Patent Box introduced by TRAF are also analysed following IAS 12 guidance notably in terms of recognition as reconciling items or as a reduction in the tax rate.

Due to the variation between cantons, the tax accounting impact of the new tax measures, the abolishment of the special tax regimes as well as their enactment date should be considered by reference to the exact status and content of the cantonal legislation.

Please download the Q&A from EXPERTsuisse Here. The Q&A is also available on the EXPERTsuisse website here.*

*Members of EXPERTsuisse have free access to this area of the website, non-members have to subscribe to the “Fachabonnement” offered by EXPERTsuisse to be able to access the publication.

By: Sarah Drye and Elise Gouin, International Tax

If you have any questions or would like additional information on the Circular, the TRAF or a specific canton, please do reach out to one of the key contacts below.

Key contacts

René Zulauf - Partner, International Tax

René has 20 years of experience in the field of international tax structuring, financial services tax and Mergers & Acquisitions. He specializes in cross-border tax planning and has assisted numerous multinationals in particular in the establishment of Swiss finance and IP structures, as well as in the structuring of Swiss trading and principal/headquarter operations.

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David McNeil - Partner, International Tax

David leads our tax accounting and tax management consulting teams in Switzerland. In his 20 years with Deloitte, David has advised on tax transformation projects, assisting in the assessment of the tax risks associated with the international business of multinational clients, the mapping of their processes and controls relating to tax and the organisational models to more effectively manage the tax functions of these organisations.

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Jacques Kistler - Partner, International Tax

Jacques is the Lead Partner of our Corporate Tax service line in the French Speaking part of Switzerland, covering international tax and M&A. He has been a full time International Corporate Tax specialist for over 23 years.

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Elise Gouin - Manager, International Tax

Elise is a Manager within the Corporate Tax team of Deloitte in Geneva since March 2015. She is involved in various corporate tax audit under IFRS and US GAAP. She is also working on tax accounting and tax process projects. She started her career as International Corporate Tax specialist in Luxembourg where she spent 9 years.

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Manuel  Angehrn - Manager, International Tax

Manuel is a Manager in the International Tax practice of Deloitte Switzerland. He has over 6 years of experience providing Swiss and international tax advisory and compliance support to multinational enterprises across a spectrum of industries including the life science, consumer business, financial services and manufacturing. He further supports private clients with their tax matters.

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