Liquidation / Swiss Tax Consequences

Preliminary remarks

The reasons justifying dissolution of a corporation are enumerated in Art. 736 CO. The liquidation will mostly be decided a shareholders' meeting. Liquidation involves assets liquidation, debt repayment, any final dividend to shareholders and deletion from the commercial register. 


Checklist - Tax consequences of the liquidation of a corporation

Taxes for 

Types of taxes
Liquidating A-AG Shareholder, individual, Shares held as private asset (private investor)Shareholder, individual, shares held as business asset or Shareholder, legal entity not benefiting participation reliefShareholder, legal entity benefiting for participation relief
Income taxes (FITA/CCITHA)- Liquidation leads to income tax due to the realization of all gains on hidden assets (Art. 58 FITAArt. 24 para. 1 CCITHA)

- Sale of securities by corporation possibly benefits from participation relief(Art. 69 ff. FITAArt. 28 para. 1 und para. 1bis CCITHA)

- Holding companies which qualify for the holding privilege according to Art. 28 para. 2 CCITHA are not subject to income tax on a cantonal level

- Tax liability is continued during liquidation

- Liquidators are jointly and several liable (Art. 55 Abs. 1 FITA)

- Liquidation surpluses represent taxable income, unless repayment of existing capital contributions (share capital and qualified former capital contributions) (Art. 20 para. 1 lit. c FITA)

- Possible partial taxation (Art. 20 para. 1bis FITA)

- Difference between the liquidation proceeds and the taxable value of the shares constitutes taxable income from self-employment or taxable net income

- Possible partial taxation for individuals holding shares as business asset 
(Art. 18b FITA
- Participation relief possibly reduces income taxes (amounts to the difference between liquidation proceeds and the total net profit (Art. 58 FITAArt. 24 para. 1 CCITHA))(Art. 69 ff. FITAArt. 28 para. 1 und para. 1bis CCITHA)

Real estate capital gains tax / Real estate transfer tax- In case of transfer of real estate located in monist cantons, possible tax on capital gains of real estate disposal and real estate transfer tax 
Withholding tax (WHTA)- Distributed liquidation proceeds subject to 35% withholding tax; repayment of share capital and reserves from capital contribution not subject(Art. 5 para. 1bis WHTA)

- Liquidators are jointly and severalliable (Art. 15 para. 1 lit. a WHTA)
- Check recovery of withholding tax- Check recovery of withholding tax or withholding tax reporting procedure - Check recovery of withholding tax or reporting procedure 
Stamp tax (STA) (Stamp issuance tax/ Stamp transfer tax)- Stamp transfer tax: In case of sale of taxable securities (Art. 13 f. STA)   
Value added tax (VAT)- In case of corporation subject to VAT, taxable transaction in principleunless exception or exemption (Art. 1821 und 23 VAT Act)