On September 12, 2018, the National Council discussed Tax Proposal 17 (TP17). The two chambers (Council of States and National Council) are largely in agreement on the structure of SV17. The only remaining differences are on the municipal article and the capital contribution principle (CDP).
The SDA media release of 12 September 2018 provides an initial overview of the most important decisions taken by the National Council on SV17:
- AHV: The AHV receives an additional CHF 2 billion per year.
- Federal tax: The cantons' share of direct federal tax will be increased from 17% to 21.2% in order to give the cantons greater leeway to reduce profit tax rates.
- Municipalities clause (difference SR/NR): The municipalities must be compensated for the effects of the corporate tax reform. In contrast, the Council of States wants to provide that the cantons only have to consider the effects.
- Dividends: Dividends on participations of at least 10% are taxed at a rate of at least 70% by the Confederation and at least 50% by the cantons.
- R&D expenses: 150% of the expenses for research and development in Germany are tax deductible.
- Patent box: Income from patents and similar rights is recorded. The discharge may not exceed 90%.
- Hidden reserves: Companies that relocate their registered office to Switzerland can amortise disclosed hidden reserves over a period of 10 years. Hidden reserves of companies that lose their cantonal tax privileges as a result of the SV17 are taxed separately.
- Minimum taxation: The total relief through interest deduction, patent box, research deductions and the separate taxation of hidden reserves is limited to 70%.
- Capital contribution principle (difference SR/NR): Listed companies may only pay out capital contribution reserves tax-free if they distribute taxable dividends in the same amount. On this point, the Council of States provides for certain exceptions for companies that move in, while the National Council has decided on two further exceptions.
- Notional Interest Deduction (NID): High-tax cantons (in particular the canton of Zurich) may allow the deduction of a notional interest on excess equity capital and thus reduce profit tax.
- Financial equalisation: The financial equalisation between the cantons should be adjusted.
- Capital tax: The cantons may provide for capital tax relief.
- Transposition: Anyone who sells holdings to a company in which he himself owns at least 50% should always have to pay tax on the profit. Under current law, the sale of investments below 5% is tax-free.
- Tax credit (Motion Pelli): Swiss permanent establishments of foreign companies should be able to claim withholding tax on income from third countries with a lump-sum tax credit under certain circumstances.
The entire parliamentary business with extensive documents as well as the minutes of the National Council are available here.
