Incorporation in Switzerland / Swiss Tax Consequences

The tax consequences of establishing a Swiss share corporation are outlined below. Subscription of shares may be made in cash and/or by in kind contributions.



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Checklist - Tax consequences of establishing a corporation

       Taxes for

Types of taxes

Established company AG 

Shareholder - Individual person, Shares held as private asset (private investor)1

Shareholder - Individual person, Shares held as business asset2

Shareholder - Legal entity

Income taxes (FITA/CCITHA)- Beginning of tax liability (Art. 54 FITA)

- Capital contribution in principle resulting in neither profit nor loss (Art. 60 lit. a FITAArt. 24 para. 2 lit. a CCITHA)

- Contribution in kind: the difference between the contribution value and the relevant (low) purchase value is qualified as private capital gain (Art. 16 para. 3 FITA)

- Exception: Transposition

- Contribution in kind of business asset to established Company might be taxable (Art. 18 para. 2 FITAArt. 8 CCITHA, provided the tax value is not transferred to investment value and no tax neutral Transaction is given (Art. 19 para. 1 lit. b FITAArt. 8 para. 3 CCITHA).  

- Contribution in kind might be taxable (Art. 58 FITAArt. 24 CCITHA), provided the value is not transferred to investment value and no tax neutral Transaction is given (Art. 61 FITAArt. 24 para. 3 CCITHA)

Real estate capital gains tax/ Real estate transfer tax - Non-cash contribution of real property might be taxable (Art. 12 para. 1 CCITHA)- Contribution in kind of real property taxable in cantons applying the monistic system of tax on earnings from real estate  (Art. 12 para. 1 CCITHA), unless there is a tax neutral transaction given(Art. 12 para. 4 lit. a CCITHA)3- Contribution in kind of real property taxable in cantons applying the monistic system of tax on earnings from real estate  (Art. 12 para. 1 CCITHA), unless there is a tax neutral transaction given(Art. 12 para. 4 lit. a CCITHA)3
Withholding tax (WHTA)
  - In principle, no withholding tax, except for contributions, in which other shareholders might indirectly benefit from  contribution in kind (Art. 4 WHTA; deemed dividend related between shareholders)

Stamp tax (STA) (Stamp issuance duty / Stamp transfer duty)- Open and undisclosed capital contributions are generally subject to 1% stamp duty (Art. 5 para. 1 lit. aArt. 8 para. 1 STA)

- The issuance of nominal share capital up to CHF 1 million is not subject to stamp duty (Art. 6 para. 1 lit. h STA)

- Contribution in kind of equity investments:
possibly may not be subject to stamp duty due to the quasi-merger (Art. 6 para. 1 lit. abis STA)

  
Value added tax (VAT)- Possible entry into VAT liability (Art. 10 ff. VAT Act) - If the shareholder is a VAT payer, a contribution in kind is subject to VAT according to practice, despite Art. 18 para. 2 lit. e VAT Act

- If the shareholder is a VAT payer, a contribution in kind is subject to VAT according to practice, despite Art. 18 para. 2 lit. e VAT Act


1 Private assets: private assets include assets that are not used for an enterprise but for private purposes (Art. 18 para. 2 FITA; Art. 8 para. 2 CCITHA).

2 Business assets: according to Art. 18 para. 2 FITA, and Art. 8 para. 2 CCITHA, all assets that are used entirely or predominantly for self-employment purposes fall in the business assets category. The same applies to investments of at least 20% of the nominal or authorized capital of a corporation or cooperative, provided that the owner declares the business assets at the time of acquisition.

3 Monist system of tax on earnings from real estate: earnings on real estate (income minus investment costs) of real property held as business asset will be taxed in the cantons BE, BL, BS, JU, NW, SZ, TI, UR and ZH as a special tax and not as part of the cantonal ordinary income or profit tax. Only gains from previous amortization subject companies of these cantons to income or earnings tax.


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