Swiss Corporate Tax Reform expected to take effect on 1 January 2020

On 19th May 2019 66 % of Swiss voters approved the so-called Swiss Tax Reform and AHV Financing Bill, which is expected to enter into force as of 1st January 2020. 

Almost every company will be affected by this change to the Swiss taxation system, including holding companies, administrative companies and mixed companies. The short transition period means that the impact of the reform should be taken in account sooner rather than later.

Key developments:
·       Most cantons have already lowered their income tax rates significantly because of the increase in the direct federal tax. Canton Zug, by way of example, will lower its effective income

·       tax rate from 14.35 % to 11.91 % (including federal, cantonal, and communal level)·       Due to this change in status, transitional measures have been introduced, meaning that there is the possibility of tax-neutral disclosure and tax-effective amortization of hidden reserves, the so-called step-up or disclosure solution 

·       Net profit from patents and similar rights will be included in the taxable net profit with a maximum reduction of 90% due to the introduction of the Patentbox

·       There will be an additional deduction for research and development

If you would like more information regarding the Swiss Corporate Tax Reform, please do not hesitate to get in touch with us.