Insights

Various amendments to the Collective Investment Schemes Ordinance (CISO) came into force on 1 March 2024. Most of the changes relate to the introduction of the new L-QIF, which we have already reported on separately. However, other significant amendments to the CISO have also been made. These also apply to existing institutions that do not manage L-QIFs and affect various aspects such as the management of liquidity risks.

Advancing digitalisation has led to companies increasingly moving applications to the cloud, which entails risks. Auditing a cloud-based IT environment is a specialised task that requires technical knowledge and experience.

The Swiss federal supreme court has ruled that taxpayers must decide whether they wish to claim the CHF 10m Swiss stamp tax exemption threshold or creation of qualified capital contribution reserves. The CHF 10m Swiss stamp tax exemption can only be claimed, if contributions/financial restructuring income are offset against losses that must be proven by a timely booking entry.

Receivables and liabilities involving related parties must comply with the arm’s length principle according to tax law. If these are inadequately interest-bearing, a taxable adjustment of interest income or a reduction of interest expense is made for the amount of the difference to an arm’s length interest rate. On February 26, 2024, the tax administration published the new tax-recognized interest rates (so-called safe-harbor rates) for 2024. While the previous year saw significant increases in interest rates, the adjustments for 2024 were more moderate. For Swiss francs and other currencies, there were even the first reductions in rates.

The legal basis for the Limited Qualified Investor Fund (L-QIF) came into force on 1 March 2024 with the amendments to the Collective Investment Schemes Act (CISA) and the Collective Investment Schemes Ordinance (CISO). Based on the Luxembourg RAIF, this is intended to introduce a more flexible fund in Switzerland, as it already exists in various forms in EU countries. The aim is to strengthen the Swiss fund centre and make it more competitive.

As you know, new VAT rates have been in force since January 1, 2024. These are: standard VAT rate 8.1 % (previously 7.7 %), reduced rate 2.6 % (previously 2.5 %) and special rate for accommodation services 3.8 % (previously 3.7 %) as well as various changes under the net tax rate and lump-sum tax rate regime. In many cases, a VAT rate change is unproblematic and is implemented to the extent that the VAT rates on the invoices are adjusted. However, there are also constellations that are not quite so easy to handle and have different accounting and contractual effects depending on the specific case.

In December 2023, the Federal Council decided to introduce the OECD/G20 minimum taxation as of January 1, 2024 and will levy a top-up tax in Switzerland.

The Federal Council is proposing various measures on how the Anti-Money Laundering Act (AMLA) should be amended in future. It will submit the dispatch with detailed explanations to Parliament in 2024. This article provides you with an overview of the new draft legislation.

After thorough negotiations, the Berne Financial Services Agreement (BFSA), also known as Mutual Recognition Agreement (MRA) has been signed on 21 December 2023 by the UK and Switzerland. It will be likely soon ratified. Setting a milestone in the mutual recognition of financial market regulation the BFSA opens and refreshes cross-border market access for financial institutions in each of the two countries. We explain the BFSA and how you can make the most of it for your business.

Swiss Federal Tax Administration (FTA) annually publishes recognized interest rates applicable for tax assessments of advances and loans in Swiss francs and in foreign currencies.

On 21 December 2023, Switzerland and the United Kingdom signed the Berne Financial Services Agreement on mutual recognition in the area of financial services. The agreement is based on the mutual recognition of the equivalence of the respective legal and supervisory frameworks in selected areas of the financial sector. The aim of the agreement is to strengthen competitiveness and promote cooperation between the two major international financial centres and to enable and facilitate cross-border market access.

Since the end of the transition period on 1 January 2024, member institutions of the Swiss Bankers Association (SBA) have had to take into account the "Guidelines for financial service providers on the integration of ESG-preferences and ESG-risks into investment advice and portfolio management" in their new client business - for existing clients, the transition period runs until 1 January 2025. Below, we inform you about the main changes and outline the possible need for action for other financial service providers such as asset managers.

Artificial intelligence (AI) has been on the regulatory radar screen in Switzerland at least since the Federal Council's announcement in November 2023. At the same time, FINMA has formulated initial regulatory expectations for financial service providers when dealing with AI. The AI regulatory process in the European Union (EU) is even further advanced. The final version of its AI regulation ("AI Act") is expected in the first quarter of 2024. These developments also require Swiss financial service providers who wish to use AI systems to familiarise themselves with the planned regulation.

Switzerland abolishes the industrial tariffs in chapters 25–97 of the customs tariff. However, agricultural and fishing duties (in chapters 1–24) and duties for some goods classified as agricultural products (in chapters 35 and 38) remain in place.

Employed persons who are affiliated to a pension fund can pay a maximum of CHF 7,056 into pillar 3a in 2024. In 2024, the maximum Pillar 3a amounts remain unchanged compared to 2023.

On December 22, 2023, the Federal Council informed about their decision to implement the OECD minimum tax concept as planned by January 1, 2024. Switzerland therefore will be a frontrunner in the implementation of the OECD tax reform together with other major European OECD member states.