Tax and Legal blog
Stay up to date with the latest tax and legal issues and developments that may affect you and your business.
Upcoming Revision of the Swiss VAT Law – Draft publication of the guidelines regarding the new e-commerce rules has been published by the SFTA on 9 July 2024
The Swiss Federal Tax Administration has released on 9 July 2024, the first draft of the guidelines for the new e-commerce Swiss VAT rules, which are set to take effect as of January 1st, 2025. More details on this can be found in our previous blog post (link).
The guidelines – through a completely new sector VAT info n° 27 - confirm and provide detailed information on the SFTA's position regarding different aspects of the new provisions. This includes description of various scenarios when a platform should be considered a deemed supplier, the conditions under which the rules are applied, and the reporting and formal obligations that platforms may have. A significant change outlined in the guidelines is that platforms, whether facilitating the supply of goods or services, shall have a recurring yearly obligation to disclose information to the SFTA if certain thresholds are met regardless of whether the supplies are in scope of the current platform rules. This introduces a new reporting obligation for platforms in Switzerland, which shall, according to the draft VAT info, be submitted electronically.
This blog aims to provide a brief overview of the main points that were published in the draft guidelines. Note, however, that they are still under consultation until 23 August 2024 and are pending confirmation from the Federal Council. Modifications of the guidelines are, therefore, still possible.
Upcoming revision of the Swiss VAT Law – introduction to the changes coming into effect in the health sector
We continue our series of blogs (n°1, n°2, n°3, n°4, n°5) on the upcoming partial revision of the Swiss VAT Law (VATL), which will come into force on the 1st of January 2025. In this blog, changes related to the health sector are presented.
From 1 January 2025, there will be changes to the governing legislation, along with new additions to VAT exempt without credit supplies and VAT rates within the Swiss VAT law, that impact the health sector.
Tax reform in Canton Ticino – What will change?
On 9th of June 2024 the people of Ticino approved the new tax reform. The main change aims to alleviate tax burdens on high incomes, enhancing Ticino’s attractiveness from a tax perspective. The reform encompasses a reduction in income tax rates, along with adjustments to inheritance and gift taxes, as well as a decrease in the tax rates on capital withdrawals from pensions.
Navigating the EU Batteries Regulation Landscape
The EU Batteries Regulation replaced the legacy Batteries Directive of 2006 and came into force on 17 August 2023. The cradle-to-grave regulatory framework aims to govern the entire life cycle of batteries from design to management and disposal – a landmark initiative to strengthen the decarbonisation process and the Circular Economy Action Plan. It is a key element of the European Green Deal and aims to increase the security of supply for raw materials while enhancing the EU’s strategic autonomy and market competitiveness. The regulation will apply to all batteries placed on the EU market. It includes portable, automotive, electric vehicle (EV), industrial, and starting, lighting and ignition (SLI) batteries (used primarily for vehicles and machinery), as well as batteries for light means of transport (LMT) such as electric bikes, e-mopeds, and e-scooters. The regulation sets mandatory requirements for end-of-life processes, such as collection and recovery targets and Extended Producer Responsibility (EPR) rules. The rigorous due diligence obligations require operators to monitor and verify the source of raw materials for batteries entering the EU market. The EU Batteries Regulation aligns with global due diligence standards and practices set by the UN, ILO, and OECD, creating a level playing field for businesses while improving supply chain management practices.
Basel Plans to Strengthen its Attractiveness as a Life Sciences Business Location
After the cantons of Grisons and Zug (see recent blog), the canton of Basel-City has now also presented its plans to strengthen its economic attractiveness. The package includes measures in the areas of innovation, society, and the environment as well as tax compensation measures. The focus is clearly on promoting the key life sciences industry. The trend in all cantons so far is towards location promotion outside the tax system and it is unclear whether the Qualified Refundable Tax Credits (“QRTC”) instrument will become established in Switzerland.
Are you ready to comply with the Swiss implementation of the crypto information exchange standard CARF?
As one of the first countries, Switzerland published its draft legislation for the domestic implementation of the OECD’s Crypto-Asset Reporting Framework (CARF). In particular, on 15 May 2024, the Swiss authorities launched a combined consultation on CARF and the amendments to the Common Reporting Standard (CRS 2.0), proposing respective additions and amendments to the Automatic Exchange of Information (AEI) Act and Ordinance. The consultation runs until 6 September 2024, and new and amended rules are anticipated to come into force on 1 January 2026. While this blog focuses on the Swiss CARF implementation, we will publish a second blog shortly focusing on CRS 2.0 and the more general aspects of the consultation.
Federal Supreme Court ruled on Income Tax Treatment of Treasury Shares
In a long-awaited landmark decision, the Federal Supreme Court (“Bundesgericht”) has ruled on the question of whether the reissue of treasury shares by a company is subject to corporate income tax. The court concluded that no taxable capital gains arise from the reissue of treasury shares since there is no legal basis in the tax law to deviate from the treatment in the financial statements (9C_135/2023, in German). Despite this important decision, however, the Federal Supreme Court has not yet clarified all aspects.
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Swiss Equity Incentive Reporting – Struggling with Equity Annexes?
Swiss tax law requires employers who incentivise employees with equity- based compensation, settled either in cash or in equity, to provide the tax administration with a summary of the taxable amounts, exchange rates used and other information. Even in the absence of any transaction, a yearly recap must be provided to the authorities. When equity awards are taxed across multiple jurisdictions the summary also needs to include the calculation method used to allocate taxing rights and determine the exact amount of Swiss taxable income.
This summary document is commonly called an “equity annex” and needs to be delivered at the same time as the Swiss salary certificate. Many employers often struggle to gather the information, prepare the annex and deliver it on time to employees.
However, there are automated reporting solutions that can make this process easier.
Court Rejects Zurich Practice to Levy Real Estate Capital Gain Tax on Shareholders in Germany
In a recent court case (GR.2023.22, in German) the Zurich Tax Appeals Court ("Steuerrekursgericht Zürich") confirmed that the sale of the majority of shares in a Swiss real estate company by a German domiciled individual constitutes a sale of financial assets, even though the sale qualifies as an indirect sale of real estate (change of economic ownership) under Zurich tax law. In view of the double taxation treaty between Switzerland and Germany and according to the prevailing academic consensus, the right to tax the capital gain was granted to Germany. As a result, the relevant city in the canton of Zurich does not have the right to levy the real estate capital gain tax on the indirectly sold property. The court decision is not yet legally binding.