Update on Swiss Principal Structures

in Tax, 04.02.2014

According to the recent verbal information from the federal tax authorities of January 2014, it is envisaged that the federal tax authorities inform all cantons of the new practice regarding Swiss principal structures by February 2014.

The cantons will receive clear instructions on approaching all principal companies in their jurisdiction and discuss with them the implementation of the new practice (see our blog entry of 27 November 2013). The federal tax authorities have stated that principal companies that already exist will have to fulfill the new requirements in 2015/2016 at the latest in order to continue to be eligible for the principal company taxation scheme.

Based on this new information, we anticipate that, in the event of non-compliance with the new regulations, no adjustments to the taxation for fiscal years which have not yet been finally assessed or a denial of the principal company taxation scheme will need to be expected. However, we nevertheless recommend analyzing your principal setup already at this stage in order to prepare possible setup changes to meet the new requirements in 2015/2016.

For pending and new tax ruling requests, the new guidelines apply with immediate effect and no adaptation period until 2015/2016 is granted as is the case for existing principal structures.

Swiss Principal Companies from KPMG Switzerland

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