Switzerland remains an extremely attractive tax location for German businesses, according to Heiko Kubaile of KPMG Zurich.
Despite ongoing tensions between Germany and Switzerland, in particular with regard to the bilateral tax agreement, aimed at resolving the longstanding issue of German residents with undeclared money held in Swiss bank accounts, there are still many German businesses seeking to invest and to settle in Switzerland, Kubaile insists.
Planning certainty is one of the key factors, Kubaile points out. The country’s extremely stable tax law is subject to few legislative amendments, while Swiss tax law provides for a so-called tax ruling (steuerlichen Vorabbescheid), enabling companies to seek tax advice from the relevant authorities prior to any investment, restructuring or transaction activity to determine the tax implications in advance. A ruling is not only provided quickly, but is also free of charge, avoiding the need for finance or tax courts in Switzerland.
Another key component of Switzerland’s success Kubaile says is the tax competition between the Swiss cantons, which the Confederation actively promotes. Taxes are levied at federal, cantonal and communal level, with the cantons able to freely determine the cantonal tax rates and tax-free allowances. This provides sufficient scope for healthy competition as regards the effective tax burden.
Switzerland and the Swiss cantons also grant companies seeking to set up in the Confederation attractive “tax holidays”, namely tax relief of up to 100% for a period of up to ten years.
Concluding his remarks, Kubaile underscores that Switzerland remains, despite continuing discussions pertaining to banking secrecy, an interesting tax and investment location for international corporations.
Despite ongoing tensions between Germany and Switzerland, in particular with regard to the bilateral tax agreement, aimed at resolving the longstanding issue of German residents with undeclared money held in Swiss bank accounts, there are still many German businesses seeking to invest and to settle in Switzerland, Kubaile insists.
Planning certainty is one of the key factors, Kubaile points out. The country’s extremely stable tax law is subject to few legislative amendments, while Swiss tax law provides for a so-called tax ruling (steuerlichen Vorabbescheid), enabling companies to seek tax advice from the relevant authorities prior to any investment, restructuring or transaction activity to determine the tax implications in advance. A ruling is not only provided quickly, but is also free of charge, avoiding the need for finance or tax courts in Switzerland.
Another key component of Switzerland’s success Kubaile says is the tax competition between the Swiss cantons, which the Confederation actively promotes. Taxes are levied at federal, cantonal and communal level, with the cantons able to freely determine the cantonal tax rates and tax-free allowances. This provides sufficient scope for healthy competition as regards the effective tax burden.
Switzerland and the Swiss cantons also grant companies seeking to set up in the Confederation attractive “tax holidays”, namely tax relief of up to 100% for a period of up to ten years.
Concluding his remarks, Kubaile underscores that Switzerland remains, despite continuing discussions pertaining to banking secrecy, an interesting tax and investment location for international corporations.
