On the 19th of May 2019 a Federal Act on Tax Reform and Financing of Old-Age and Survivors’ Insurance has passed the National Referendum. Therefore, tax privileges within cantons for undertakings which are predominantly internationally active shall be abolished. Such undertakings shall have to pay a full corporate income tax.
According to art. 20 par. 1bis and art. 18b par. 1 of the Federal Income Tax Act shareholders who hold at least 10% of a company’s capital are obliged to pay tax on the income from equity investments as a federal income tax for 60% in the personal assets and for 50% in the business assets. In four cantons of Switzerland the taxation is even below 50%. The adoption of the above-mentioned Act entails that such a reduced taxation shall thereby amount to 70% in the Confederation and at least to 50% in cantons.
The profit out of a share sale is as a general rule tax-free. Under the new Act the tax exemption shall be repealed in case an individual or a legal entity sells shares to a company which is controlled by him/her or it.
If You have any questions concerning other ramifications of the newly adopted Federal Act on Tax Reform and Financing of Old-Age and Survivors’ Insurance, do not hesitate to contact us!