Swiss Tax e-newsletter - June 2020
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Financing conditions between related parties - when the crisis changes the rules of the game!
The outstanding situation we have been experiencing for several months has also impacted the Swiss tax system, forcing the competent tax authorities to implement measures that are not insignificant and welcome for taxpayers, such as extensions of the deadline for filing tax returns and VAT statements, the waiver of interest on arrears and the possibility of booking Covid-19 provisions in certain cantons. (Article in French)
Tax deduction of provisions Covid-19
Under current commercial law, provisions can be booked as measures to ensure the long-term performance of the company. Companies that are directly or indirectly affected by the current situation are likely to include "Covid 19" provisions in their 2019 financial statements.(Article in French)
Asset deal: beware of VAT!
Given the post-confinement economic situation, it is highly likely that there will be an increase in the number of total or partial business disposals. A judgment of the Federal Court of 21 February 2020 (2C_923/2018) shows that there are VAT risks not only when taking over a whole company, but also in the case of a partial takeover (transfer of assets and liabilities). (Article in French)
Foreign withholding tax reform: Reduction of the tax burden and the double taxation risk
Interest, dividend or licence fee income is a concrete example of possible international double taxation for Swiss corporate entities. Indeed, this occurs where such revenues, subject to a withholding tax levied in many source states, are likewise taxable in the recipient’s residence state (i.e. Switzerland).