Tax proposal 17

An update to the prospected amendments to Swiss tax legislation

Hansjürg Szadrowsky

The Swiss tax system in force provides certain tax privileges at federal and cantonal level, which are internationally considered harmful tax practices. With this background, the Swiss government is currently adopting its tax legislation in order to become compliant with internationally accepted standards. Main focus is on abolishing the status companies (such as domiciled companies, holding companies and principal structures) on the one hand, but maintaining a competitive environment for international business on the other.


At the end of September 2018, the Swiss parliament passed the bill in a final vote. As the bill is subject to a public referendum, it is expected that the final decision will be taken by a public vote in spring 2019. Thus it is uncertain whether the law will enter into force in 2020. Nevertheless, a summary of the most important measures – besides others – is given below:

  • The tax privileges which are internationally no longer accepted, such as domiciled companies, holding companies and principal structures, will be abolished.
  • Hidden reserves, which have been generated during a granted tax privilege and which are realized during a maximum period of five years after the abolishing of the respective tax privilege are separately taxed with a certain discount.
  • A tax-neutral step-up of hidden reserves upon the migration of companies into Switzerland or upon the cancellation of a tax exemption will be newly allowed. Hidden reserves can therefore be disclosed in the tax balance (step-up) and amortized tax wise over ten years.
  • On cantonal level, there will be introduced a patent box. Income from patents and comparable rights are exempt from the taxable base up to a maximum rate of 90%.
  • Domestic R&D expenses are deductible at the rate of 150%
  • Cantons can implement a notional interest deduction if their statutory tax rate exceeds a certain percentage. Currently, only the canton of Zurich would meet the relevant conditions.
  • The cantons may provide for a reduced capital tax on equity attributable to participations, patents and similar rights.
  • Dividends from participations of at least 10%, held by individuals, are taxed at 70% on federal level and at least 50% on cantonal level.
  • The possibility for companies to distribute dividends tax-free from capital contribution reserves is restricted for listed companies. The taxable dividend of such companies must not be lower than the dividend distributed from tax-free capital contribution reserves.




Hansjürg Szadrowsky
Hansjürg Szadrowsky
Certified Tax Expert, Partner
Crowe Curator Tax AG