On February 5th 2019, the Swiss Federal Tax Administration (SFTA) published an important communication on its practice in connection with bonds issued abroad with a guarantee of a Swiss group company. In short, it alleviates the restrictions relating to the use in Switzerland of funds obtained by a foreign bond issuance. Up to the total amount of the equity of the foreign subsidiaries of the group, these funds can be lent to Swiss companies without a requalification of the foreign issuance as a Swiss bond. In addition, loans made by Swiss companies to foreign group companies is also taken into account to compute the amount that can be repatriated in Switzerland without adverse Swiss tax consequences.
The practice of the SFTA in connection with foreign bonds guaranteed by a Swiss parent does not rely on a clear legal basis. But it represents an important issue for all groups that need to finance themselves on international markets and face restriction on the use of these funds in Switzerland. The practice published on February 5th, 2019 is therefore an important step in the right direction that will help to reduce the incentive for Swiss group to invest abroad.
OBERSON ABELS has been recognized, once again, as the Swiss best law firm in Tax law according to the survey recently published by Le Temps and Bilanz. OBERSON ABELS is also well ranked in several other fields such as Commercial law and particularly in Banking and Capital Market, M&A and Corporate law.
The whole OBRSON ABELS team thank you for this recognition !
We are delighted to announce that, on Thursday January 25, 2018, the Geneva Parliament has elected Caroline Goette as Associate Judge (Juge assesseur) of the Geneva First Instance Administrative Court (tax matters).
Caroline Goette passed the bar in 1996 and is admitted to practice before all Swiss courts. She has a working experience of more than ten years at the Geneva Court of Justice (Administrative Chamber).
She advises primarily on the tax aspects of inheritance matters. She is a member of the Specialized Committee on Inheritance Law, which has been set up by the Geneva Bar Association.
In parallel to her activities as lawyer, Caroline Goette participated in the launch of the Swiss-French section of the IFA Swiss WIN (Women in IFA Network). She also took part in a series of events organized by the Career Women's Forum, of which she is a member.
OBERSON ABELS has published a short note (Legal Update) which addresses the practical implications of the new Outsourcing Circular issued by the Swiss financial regulator FINMA.
FINMA has published a revised version of the Outsourcing Circular (which is now referred to as FINMA Circular 2018/3), which will enter into force on April 1st, 2018. This Circular sets forth the requirements which an outsourcing project in the finance and insurance industries must meet in order to be implemented without requiring a specific FINMA approval.
Please do not hesitate to send an email to firstname.lastname@example.org should you wish to obtain a copy of this Legal Update.
The Vaud Government (Conseil d’Etat) just communicated a very important update for all companies doing business in the canton of Vaud in the sense that the decision has been made that the cantonal corporate tax reform (CIT III VD) would already be implemented on January 1st, 2019.
This cantonal tax reform takes place in the more general context of the corporate income tax reform at federal level (one of the purpose of which is to abolish the special tax regimes, in particular the holding and the mixed cantonal regimes). At its level, the canton of Vaud had adopted measures consisting in particular in a corporate tax rate reduction to 13.79% (cantonal, communal and federal tax), that had been approved by a popular vote of 87% of the cantonal voters.
The entry into force of the cantonal reform was foreseen for January 1, 2019. It is however linked to the federal corporate income tax reform that is currently still in progress at federal level with an uncertain date of entry into force. As you are aware, the initial federal project (federal CIT III) was rejected by a popular vote in February 2017. This project was intending to abolish, as mentioned above, the special tax regimes, and to introduce specific tax measures (e.g. patent box, NID, etc.) to (partially) compensate the end of these tax regimes. It was also providing for financial compensation mechanisms between the Confederation and the cantons. After the popular refusal of the federal CIT III, a new draft law (PF 17) was issued and is currently in discussion at the federal level. As indicated, the legislative timetable of this federal project is not clearly defined yet. Its final content, as well as the date of its entry into force at federal level, are therefore, still uncertain.
In this context, the question was whether the Vaud Government would maintain the entry into force of the Vaud cantonal tax reform on January 1, 2019 or, whether due to the uncertainty at federal level, would recommend to the cantonal parliament to defer the cantonal reform.
This point has now been clarified while the Vaud Government announced today its program for the calendar years 2017 to 2022. The entry into force of the CIT III VD has now been confirmed for January 1, 2019, On this date, the effective ordinary corporate tax rate will be reduced to 13.79%.
This is obviously a very good news for all corporations doing business in the canton of Vaud, irrespective of their mode of taxation (ordinary or special tax regime). Companies with a special tax regime may now envision to waive their privileged tax regime in order to be taxed under the ordinary tax regime at an effective tax rate of 13.79%, as this option may appears to be preferable for them in the international context. If these companies rather elect to keep their privileged tax regime until the entry into force of the federal reform, the Vaud corporate tax reform gives them a clear view on their tax treatment in the near future and this independently of the discussions at federal level.
And of course, the entry into force of the Vaud corporate tax reform in 2019 represents a substantial incentive and improvement of the attractiveness for the canton of Vaud that will offer a competitive corporate tax rate and an improved legal security for corporations taxed in Vaud or who would choose to implement their activities there.
Needless to say, OBERSON ABELS SA would be pleased to discuss this with you or answer any question that you may have.
We are delighted to announce that Dominique Gay, Bénédicte Mariéthoz Comoli, Anne Tissot Benedetto and Alexandra Pillonel have been promoted to Counsel of our firm.
On October 16, Xavier Oberson will take part to TaxCOOP 2017, side event of the Fifteenth Session of the Committee of Experts on International Cooperation in Tax Matters of the United Nations
The panel he will take part of will provide an overview of the impact of tax competition and discuss developments with regard to the taxation of MNEs, SMEs and individuals, such as policies to attract capital or to offer tax strategies to MNEs or wealthy individuals. Panelists will address facts and evidence, of lack thereof, of a race to the bottom and its potential effects on countries.
To watch live : www.taxcoop-conference.com