While signatures are being collected to vote on the latest tax reform, the Swiss Federal Tax Administration recently announced that it will no longer apply federal practices concerning principal companies and Swiss finance branches to new companies from 2019.
The Federal Act on Tax Reform and AHV Financing (TRAF) introduces legislative measures to bring Swiss corporate tax law in line with international standards. Thereby, cantonal tax status companies like holding or mixed companies shall be abolished and new measures shall be introduced. In this context, the federal practices on tax allocation for principal companies and Swiss finance branches shall also be abolished; no formal change of the tax law is required in this regard. Further details on the law package can be found here.
The law package was finally approved by Parliament on 28 September 2018. Currently, the referendum period is running and citizens may call a public vote on the new law by filing a minimum of 50,000 signatures by 17 January 2019. If requested, the public vote would be held on 19 May 2019. According to the Federal Council, the reform shall enter into force on 1 January 2020. Working towards this implementation, the Federal Tax Administration (FTA) has recently announced that it will no longer apply federal practices concerning principal companies and Swiss finance branches to new companies from 2019. This announcement is not unexpected and represents a step towards implementation of the reform as of the beginning of 2020 when these federal practices would also be abolished for existing principal companies and Swiss finance branches.