NEWS

Tax news from the Federal parliament

In recent weeks, a number of resolutions have been passed and changes initiated by the Federal parliament. Here is a brief overview of the most important points:

Income tax
Planned increase in deduction for premiums for mandatory health care and accident insurance for direct federal tax purposes
The deduction is to be increased from CHF 1,700 to CHF 3,000 or from CHF 3,500 to CHF 6,000 for married couples, respectively. In addition, the deduction limit per child or person requiring support is to be increase from CHF 700 to CHF 1,200. As before, the cantons can set the deduction amount for cantonal/communal income tax purposes themselves.

Withholding tax
Planned simplifications in the notification procedure in the group
The required minimum participation in the national relationship is to be reduced to 10% (from 20%) and, in addition, the confirmation for the notification procedure (Form 823/B/C) to be obtained in the international relationship should be valid for five (instead of three) years.

Withholding tax and securities transfer tax
Planned abolition of withholding tax on domestic interest and securities transfer tax on domestic bonds
However, the abolition does not extend to interest on customer deposits with domestic natural persons. In conjunction with the abolition of the securities transfer tax on domestic bonds, Switzerland is to be strengthened as a location for the debt capital market, especially for group financing activities.

Issuance stamp tax
Abolition as of January 1, 2022 (referendum announced)
The federal government levies an issuance stamp tax of 1% on contributions of equity capital to Swiss corporations and cooperatives by the holders of equity interests. It has been decided in principle to abolish this tax as of January 1, 2022. However, the Social Democratic Party has announced a referendum and thus it could come to a public vote.

VAT
No input tax adjustment for COVID-19 contributions
Taxable entities that receive COVID-19 contributions in the form of subsidies (payments, interest benefits on loans, loan repayment waivers, or debt forgiveness) do not have to make a reduction in the input tax deduction on the cost of goods and investments.

Interest on late payments and refunds
Unification of interest rates on duties and taxes as of January 1, 2022
As of January 1, 2022, the uniform rate for the interest for refunds and the late interest will be 4.0% for, among others, customs duties, stamp duties, VAT, direct federal tax and withholding tax, etc. For the purposes of direct federal tax, the late interest will thus be increased from 3% to 4%, but the interest on refunds will also be increased from the current 0% to 4%. The interest rate for voluntary prepayments remains at 0.0%.

For any further questions or advice, please contact Remo Merz, Swiss certified tax expert, merz@fineac.ch.

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