Tax Partner AG, Taxand Switzerland, summarises and assesses the dispatch of the Swiss Federal Council on its Tax Proposal 2017 (TP17).


The Council of States, as the first of the two chambers of Parliament, debated TP17 on 7 June 2018, and endorsed the proposals of its Economic Affairs and Taxation Committee (EATC). This resulted in the following key changes to the dispatch of the Federal Council:

  • Listed companies shall have limited scope for the tax free distribution of paid-in capital surplus (capital contribution reserves)
  • High-tax cantons shall have the option of introducing a deduction for equity financing (the so-called notional interest deduction)
  • Partial dividend taxation at cantonal level shall be adjusted
  • The cantons may reduce their capital tax rate also with regard to loans
  • TP17 will be tied to the reform of the national old-age pension system (OASI)
  • The increase in the child allowance rate shall be cancelled

Discover more: Update on Tax Proposal 2017

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Taxand's Take

The aforementioned changes made by the Council of States are not final. In a next step, the National Council, as the second chamber of Parliament, will deliberate TP17 in the upcoming fall session. If all goes to plan, TP17 could clear the parliamentary hurdle in the fall 2018 session. If no referendum is called, the first measures could be implemented as soon as 1 January 2019; the bulk of the reform could enter into force as of 1 January 2020.

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Article tags

International Tax | Switzerland

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