AFBS Info Tax - December 2019
Swiss Federal Council
Amendments on the Ordinance on Withholding Tax
On 6 December 2019, the Federal Council opened consultations on amendments to the Ordinance on Withholding Tax. Among others, heirs should reclaim the withholding tax on inheritance income in their canton of residence. At present, responsible authority for refunding the withholding tax to the heirs is the last canton of residence of the testator.
Revision of the Law on Implementation of International Tax Agreements
The revision aims at aligning the law, which is nearly unchanged since its adoption in 1951, with the present international practice. Important points of the revision:
- Clarification of the performance of mutual agreement procedures: definition of rights and duties of the concerned person; definition by law of the initiation of a procedure; decree of agreement to confirm the conclusion of an agreement, which allows the tax authorities to implement the decision.
- Procedures for the refund of anticipatory tax is aligned to the international standards and accompanied by penal measures.
- Introduction of penal measures in relation with the computation of foreign residual tax.
- The Federal Council maintains the competence to issue regulation for the application of agreements against double taxation.
Art 2-23 Definition of the mutual agreement procedures and the application of the norm by international or national law. Art 12 specifies that the applicant files for a procedure to which he is not a party, as it is between the governmetn authorities. Art 18/19 clarify that implementation of the decision occurs through the competent tax authorities or through decree; deadline for implementation is ten years;
Art 18-23 Implementation of decision occurs through the competent tax authorities or through a decree; decisions' validity expires after ten years.
Art 24-33 The SFTA is the competent Swiss authority. Art 29-33 define penalties in case of unlawful refund of Swiss anticipatory tax or of foreign residual tax.
The consultation expires on 27 March 2020.
In the context of the implementation of BEPS Base Erosion and Profit Shifting project Switzerland participates in the international scheme of exchange of country-by-country reports on multinational firms. The standard entered into force on 1.12.2017 and reports are to be exchanged at latest on the tax year 2018 for the first time. The State Secretariat for International Finance SIF publishes a list of participating countries and date of first exchange.
The SFTA files reports on a quarterly basis. The next filing will take place in December 2019 (on the tax year 2017) and will be available for the following jurisdictions: Argentina, Australia, Austria, Belgium, Brazil, Czech Republic, Colombia, Denmark, Estonia, Finland, France, Germany, Greece, Guernsey, Iceland, India, Indonesia, Ireland, Isle of Man, Italy, Japan, Jersey, Korea, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Seychelles (new since December 2019), Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, United Kingdom and Uruguay.
No exchange will take place with Bulgaria, which suffered data theft by hackers. It declared no longer receiving but continuing to issue reports.
Belgium: Tax on Securities Accounts repealed
The Belgian Supreme Court declared unconstitutional the Belgian tax on securities accounts, which will thus be abolished. The ruling annuls the introduction of the tax that took place by legislation of 7.2.2018. It states that the tax infringes the principles of equality and non-discrimination.
Implementation of the Taxe sur les Opérations Boursières raises questions for the banks. The scheme requires the bank to calculate, levy and pay the tax that the client is due. It is complicated to set up a local paying agent. Most banks either designate a local partner that can act on behalf of the client or provide the necessary information to their clients who pay directly to the local tax authorities. Since the client is liable for the tax, he needs to have the possibility to confirm correctness of the amounts identified. No third party provider could be identified.
Info KPMG CH: EN (only)