At its meeting on 9 June 2017, the Federal Council opened the consultation process on the Federal Act on the calculation of the participation deduction for too-big-to-fail instruments (TBTF instruments).
According to a Federal Council media release dated 9 June 2017, the federal law submitted for consultation is intended to prevent an additional burden arising from the issuance of certain financial instruments in order to facilitate the banks' equity capital build-up by eliminating the negative effects of TBTF instruments on the participation deduction for profit tax.
To this end, according to the press release, the interest paid to investors and the transfer of funds from the TBTF instruments, as shown in the balance sheet, should be excluded from the calculation of the participation deduction.
Further details and information can be found in the media release dated 9 June 2017 and the subsequent consultation documents:
With the planned legal adjustments, the exemption of TBTF instruments from withholding tax and stamp duty, which has already come into force, is now also to be continued for profit taxes in order to strengthen the equity base of the banks (see also the NZZ article of 9 June 2017).
