On 17 September 2018, the Council of States discussed tax bill 17 (SV17) and approved the National Council's draft. The template is thus cleaned up.
The Council of States has thus resolved the last differences concerning the communal clause and the capital contribution principle. The SV17 is thus ready for the final vote at the end of the autumn session. Both the National Council and the Council of States approved the linking of the corporate tax reform and the AHV by a large majority. In the session of the Council of States on 17 September 2018, the only remaining issues to be resolved in the Council of States were the wording of the municipal article and the restriction of the capital contribution principle (CEP). In particular, the National Council had decided that the CEP should apply without restriction to companies that have moved to Switzerland since the referendum on Corporate Tax Reform II (USR II), i.e. since February 2008. For the Council of States, on the other hand, the entry into force of the USR II at the beginning of 2011 was initially decisive. However, the Council of States has now given way in the context of the settlement of differences. This also applies to the municipal article: The effects of the corporate tax reform on the municipalities must not only be taken into account, but also effectively compensated.
In accordance with the SDA media release of 12 September 2018, the following overview of the most important cornerstones of SV17 is thus provided:
- 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: The municipalities must be compensated for the effects of the corporate tax reform.
- 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: Listed companies may only pay out capital contribution reserves tax-free if they distribute taxable dividends in the same amount. Exceptions apply to companies that have moved in after February 24, 2008.
- 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 (18,031) as well as the minutes of the Council of States can be accessed here.
