News - March 2022

At RSM, we aim to keep a close eye on tax issues, new legislation and recent case law of importance to our clients. We therefore share with you some of the latest changes and decisions in this article! 

Switzerland-France: taxation of shares held in a Société Civile Immobilière (SCI)

In which country will the income and wealth arising from shares held in a SCI, if treated transparently in France, be taxed when the holder of the shares is a Swiss resident and the property is located in France?

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How to prevent a Ransomware attack?

The number of cyber-attacks has increased by more than 50% in the world in 2021. For Switzerland, we see an increase of 65% compared to 2020. How to protect yourself? With this article, you will develop your knowledge on :

  • What is a ransomware ?
  • What is the goal ?
  • What to do in case of an attack ?
  • Do we have to pay the ransom?

Read more about this subject

Revision of the law on public limited companies: New regulations

Following years of discussion and preparatory work, the Swiss Parliament adopted the revision of the law on public limited companies on 18 June 2020. The aim of the revision is to modernise the law on public limited companies. Through this article, you will be informed about :

  • Organisation of the General Assembly
  • Shareholder's rights
  • Minder compensation Initiative and gender equality quotas
  • Capital structure
  • Insolvency
  • Transparency in commodity companies

Find out more about these measures in our article.

Real Estate Management

Real estate is a difficult market, with tight credit, changing accounting standards, shifting tax concerns - these are challenging times for real estate and construction companies.
In this section, you will find various topics including

  • Overview of Swiss real estate tax
  • Acquiring Swiss real estate
  • Selling and transfering Swiss real estate
  • Holding Swiss real estate

Read more about it

Other subjects - March 2022

Automatic Exchange of Information (AEI)

In 2014, the Council of the Organisation for Economic Co-operation and Development (OECD) approved the new international standard for the automatic exchange of information in tax matters, the so-called " AEI standard ". So far, more than 100 states, including Switzerland and all major financial centres, have declared their readiness to adopt this standard.

Under the AEI, banks, collective investment schemes and certain insurance companies collect financial information on their clients, such as capital income and account balances, assuming they are resident abroad for tax purposes. This information is then transmitted to the Federal Tax Administration (FTA) via the "ePortal" platform. This platform is then used to transmit the requested information to the competent tax authorities abroad.

However, the introduction of the AEI does not affect Swiss banking secrecy. Indeed, persons with tax residence in Switzerland still benefit from it with respect to their bank accounts in Switzerland.

In December 2021, the Federal Council proposed to agree on the AEI with the following twelve additional states and territories: Ecuador, Georgia, Jamaica, Jordan, Kenya, Montenegro, Morocco, Moldova, New Caledonia, Thailand, Uganda and Ukraine. By adopting the AEI with emerging and developing countries, Switzerland continues to work towards meeting international standards in the fight against financial crime, tax evasion, money laundering and corruption.

VAT: Private share of company vehicles

As of 1 January 2022, the Federal Direct Tax has increased the flat rate for the taxation of the private use of company cars from 0.8% to 0.9% (see previous newsletter on this subject). From now on, the flat rate of 0.9% is also applicable for VAT returns.

For VAT purposes, a service is considered to be provided for consideration if the employer provides his staff with a company car which may also be used privately. In this case the service must be charged VAT at the standard rate.

As a rule, the corresponding value is determined on a flat-rate basis. The rate is now 0.9% per month of the purchase price excluding VAT, but at least CHF 150 per month. The amount calculated in this way is considered "VAT included". As a reminder, the lump-sum calculation of the private share is only permitted if the vehicle is used predominantly, i.e. more than 50%, for commercial purposes. Otherwise, the private use must be calculated in an effective way (via a logbook kept in a strict manner where the reference rate per kilometre driven privately is 0.70 centimes). The calculation is as follows:

Example 1
Purchase price CHF 43,000 (without VAT),

0.9% per month = CHF 387 per month

Amount to be declared (12 x CHF 387) = CHF 4644

Tax calculation: 7.7% of CHF 4644 (107.7%) = CHF 332.00

Example 2
Purchase price CHF 15,000 (without VAT),

0.9% per month = CHF 135 per month

Amount to be declared (12 x CHF 150*) = CHF 1800

Tax calculation: 7.7% of CHF 1,800 (107.7%) = CHF 128.70

Example 3
Private vehicle share > 50%.

Km driven privately during the year: 7500

Amount to be declared (7000 x CHF 0.70*) = CHF 4900

Tax calculation: 7.7% of CHF 4,900 (107.7%) = CHF 377.30

In example 2, the monthly rate of 0.9% then results in an amount of less than CHF 150. Therefore, the minimum amount of CHF 150 should be used to calculate the VAT due, which is to be entered in the VAT statement under 302.

If a company owned the vehicles via a leasing contract, the basis for calculation is the cash purchase price stated in the leasing contract (including any special equipment), "without VAT". If the vehicle is taken back on expiry or termination of the contract, this cash purchase price is also the basis for calculating the private share on a flat-rate basis, even if a separate purchase contract is concluded at that time. If, on expiry of the leasing contract, the vehicle is not taken over but financed by a new leasing contract, the value stated in the first leasing contract shall still serve as the basis for the flat-rate calculation of the private share.

2023 : Increase in the deduction for childcare expenses

As of 1 January 2023, the deduction for childcare costs incurred by third parties will be revealed in the direct federal tax (DFT). Thus, it will be possible to deduct a maximum amount of CHF 25,000 per child and per year from the direct federal tax, whereas currently the maximum deduction is CHF 10,100. However, the conditions for the deduction remain unchanged, i.e. only the actual and duly documented costs for the care by third parties of children under 14 years of age living in the same household as the parents will be taken into account. This deduction is granted when the following conditions are met:

·        Married parents, living in a joint household, both gainfully employed.

·        The single, widowed, separated or divorced parent, living in a joint household with his/her dependent child(ren), is gainfully employed.

·        The costs incurred are documented by means of invoices or salary certificates of the domestic staff who look after the child (nursery school, day mother, etc.)

This deduction is also granted in the event of training or incapacity to work.

At the level of cantonal and communal tax (ICC), each canton applies its own maximum deduction. Thus, the deduction for third party care costs amounts to the following maximums:  

·        Vaud: CHF 9'100

·        Geneva: CHF 25'000

·        Fribourg/Freiburg:   CHF 12'000

·        Neuchâtel: CHF 20'400

·        Valais/Wallis: CHF  3’000

The Federal Chambers adopted this amendment in the autumn session of 2021. As the referendum deadline for this decision expired on 20 January 2022 without being used, the amendment will enter into force on 1 January 2023.

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