Switzerland: Swiss House of Representatives makes the CTR III package even more attractive

Jacques Kistler		Rene Zulauf

The Swiss House of Representatives voted on the Swiss Corporate Tax Reform III (CTR III) on March 16 and 17. The House voted, among others, in favour of the following replacement measures to compensate for the abolition of special income tax regimes:

• Introduction of notional interest deduction (NID) on a federal level – and at a cantonal/communal level at the discretion of the cantons;
• Introduction of a patent box with the possibility for the cantons for a full relief;
• Introduction of R&D super deductions extended to foreign R&D activities with a super deduction that is not limited to 150%, but is at the discretion of the cantons;
• Tax privileged release of hidden reserves for companies transitioning out of tax privileged regimes and step up on migration of companies or activities to Switzerland;
• Reduced annual capital tax on participations, patented IP and on intra-group loans;
• Introduction of a tonnage tax for maritime shipping companies;
• Limitation of the combined tax relief resulting from the release of hidden reserves when transitioning out of tax privileged regimes, the patent box, the R&D super deductions and the NID to 80%.

In turn, the abolition of the 1% capital issuance tax has been postponed for now.

The tax reform package voted for by the Swiss House of Representatives will now go back to the Swiss Senate, which proposed a somewhat more restrictive version of the tax reform package. The two parliamentary chambers will have to settle their differences in the summer 2016 session between May 30 and June 17 2016.

In addition, there may be a referendum and a national vote on the legislation. Cantonal tax laws would subsequently have to be amended, so the law would likely become effective at the earliest on January 1 2019.

Jacques Kistler (jkistler@deloitte.ch) and Rene Zulauf (rzulauf@deloitte.ch)
Deloitte
Tel: +41 58 279 6359 and +41 58 279 8164

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