taxlawblog.ch Your blog on Swiss tax law

On 5 April 2017, the Federal Council opened the consultation procedure on the tax treatment of third childcare costs. According to this, third-childcare costs should be more tax-deductible. In the case of direct federal tax, a maximum of CHF 25,000 should be allowed for deduction, while the cantons are obliged to grant a deduction of at least CHF 10,000.

The Federal Council rejects the direct counter-proposal to the popular initiative "Yes to the protection of privacy". This is the result of the Federal Council's statement to the Economic Commission of the Council of States (WAK-S), which the Federal Council adopted at its meeting on 5 April 2017.

On 3 April 2017, the Swiss Federal Tax Administration (FTA) published a first draft for the selective specification of the VAT sector info 10 (public and tourist transport companies).

In its quarterly newsletter, the Federal Tax Administration (FTA) provides information on current topics in tax law. In the current issue Q1/2017 it informs among other things about the current developments concerning the tax proposal 17 (formerly Corporate Tax Reform III) and the VAT rates as of January 1, 2018.

Following the rejection of the Corporate Tax Reform III (USR III), the Cantonal Government of Berne intends to implement its planned tax strategy in two stages. In a first stage, the profit tax burden is to be reduced from the current 21.64% to 20.20% by 2019 and to 18.71% by 2020, before being reassessed in a second stage in 2021.

On 28 March 2017, the Italian tax authorities published a decision clarifying the taxation of cross-border commuters within the meaning of the cross-border commuter agreement between Switzerland and Italy.

On 23 March 2017, the Swiss Federal Tax Administration (FTA) published various adjustments to the share price lists (ICTax) regarding the Federal Direct Tax 2016.

At its meeting on 16 March 2017, the Council of States approved the multilateral agreement on the exchange of country-specific reports (ALBA agreement; Federal Council business 16.078) by 37 votes to 3 and the Implementation Act by 40 votes to 1 with 2 abstentions. The Council of States is the first body to deal with the matter. In a next step, the business will be discussed by the National Council.

On 21 March 2017, Switzerland and Pakistan signed a new double taxation agreement (DTA) in the field of income taxes.

According to a press release issued by the FTA on 20 March 2017, the first function for automatic information exchange (AIA) is available on the ESTV SuisseTax portal. Reporting Swiss financial institutions can fulfil their registration obligation there.

The 2020 pension reform has been adjusted and was adopted by the Swiss Parliament in the final vote of 17 March 2017. The most controversial issue was the increase in value-added tax, which is now to be increased by 0.6% in two stages (0.3% as at 1.1.2018 and 0.3% as at 1.1.2021) in order to finance the AHV.

The 2020 pension reform has been adjusted and is ready for the final vote on 17 March 2017. The increase in value-added tax (VAT) was particularly controversial (cf. our contribution of 3 March 2017).

The Swiss Federal Tax Administration (FTA) has published a circular on printed matters (order forms) concerning the direct federal tax, the flat-rate tax credit (pStA) and the additional tax retention USA (zStR USA) for the 2017 tax period for the attention of the cantonal administrations for the direct federal tax and the central withholding tax authorities of the cantons.

The Federal Tax Administration (FTA) has published an updated list of amendments to laws and ordinances relating to direct federal tax, value added tax, withholding tax and stamp duties.

The 2020 pension reform stands and falls above all with the increase in value-added tax (VAT), which is the subject of the settlement of differences between the Council of States and the National Council in the parliamentary spring session of 2017. The aim is to bring the reform to the final vote in the current session.

The Federal Tax Administration (FTA) was allowed to provide administrative assistance to the Austrian Ministry of Finance on the basis of the double taxation agreement between Switzerland and Austria. The Federal Administrative Court rejects an appeal lodged against it by decision (A-6394/2016) of 16 February 2017.

On 8 March 2017, the Swiss Federal Tax Administration (FTA) published various adjustments to the share price lists (ICTax) regarding the Federal Direct Tax 2016.

At its meeting on 10 March 2017, the Swiss Federal Council decided to strengthen the financing activities of groups of companies in Switzerland and approved the amendment to the Withholding Tax Ordinance. The amendment shall enter into force on 1 April 2017.

The National Council adopts a motion at its meeting of 8 March 2017 instructing the Federal Council to propose to Parliament an amendment to the Value Added Tax Act (VAT Act).

On 7 March 2017, the German Federal Ministry of Finance published a consultation agreement (BMF letter of 3 March 2017) on the conduct of arbitration proceedings under the double taxation agreement between Germany and Switzerland.

On 2 February 2017, the Federal Department of Finance (FDF) opened a consultation on the introduction of automatic information exchange in tax matters (AIA) with additional countries. The Principality of Liechtenstein in particular has a common economic and monetary area due to numerous treaties with Switzerland. Political and economic relations with the Principality of Liechtenstein make the introduction of the AIA appear necessary (planned entry into force 2018, planned data exchange 2019).

On 25 January 2017, the Swiss Federal Council approved the agreement between Switzerland and France on the tax regime at Basel-Mulhouse airport and an agreement on compensation for the costs incurred by the French air traffic control authority in the Swiss sector (media release of 25 January 2017). The VAT derogation requested by France has since been approved by the Council of the European Union (implementing Decision 2017/320 of 21 February 2017).

The 2020 pension reform stands and falls above all with the increase in value added tax. This is the subject of the settlement of differences between the Council of States and the National Council in the parliamentary spring session 2017.

The Federal Department of Finance (FDF) is pressing ahead with work on a new edition of the Corporate Tax Reform III (USR III) entitled Tax Submission 17 (SV17).

The European Council has assessed the state of the EU's relations with the Swiss Confederation and has expressed its opinion, inter alia, on the vote on Corporate Tax Reform III.