In the course of the tax bill and AHV financing (STAF), the Federal Tax Administration (FTA) will no longer apply the federal practices regarding principal companies and Swiss Finance Branches to companies wishing to use these practices for the first time from 2019.
The STAF is a legislative measure to bring Swiss corporate tax law into line with international requirements (see our previous contributions at https://www.taxlawblog.ch/blog/aktuelle-themen/staf-vormals-sv17-usr-iii).
As announced in the Dispatch on the Federal Tax Bill 17 (SV17) of 21 March 2018 (section 3.2.2.1), the regulations for principal companies and Swiss Finance Branches (federal practices) will also be abolished at the practice level in this context. The abolition of these federal practices does not require any legal adaptation.
According to the media release of 15 November 2018 (complete release as PDF), the federal practices for the tax separation of principal companies and the Swiss Finance Branches can in principle no longer be claimed by taxpayers for the first time as of 1 January 2019 (so-called closure). Taxpayers who already apply these practices before 1 January 2019 may also benefit from the practice in 2019. The same applies to taxpayers who will apply these Federal Practices for the first time from 1 January 2019, based on a ruling, provided that the competent tax authority has countersigned the ruling prior to publication of the present notice of practice.
Circular Letter No. 8 of the FTA on the international tax separation of principal companies dated 18 December 2001 is amended accordingly.
The press release (in the online version) and further information are available here.
