Insights

Two key amendments, in particular, will come into effect on 1 January 2023 as part of the AMLA revision: the obligation to verify the details of the beneficial owner and the obligation to update client details at regular intervals.

The new Swiss corporate law will enter into force on January 1st, 2023. The key changes are greater flexibility for share capital and equity distributions, enhancement of shareholders’ rights in terms of better corporate governance and modernization of shareholders’ meetings. The following provides an overview of the main innovations from a practical point of view.

Increase in maximum pillar 3a deductions in the 2023 tax year.

EU Directive 2019/1937 on the protection of persons who report breaches of Union law («Whistleblower Directive») entered into force on 16 December 2019. The Whistleblower Directive is intended to facilitate the disclosure of breaches of EU law and guarantee a uniform, high level of protection for whistleblowers throughout the entire EU. It has far-reaching consequences and is also relevant for Swiss companies with a presence in the EU area.

On 4 May 2022, the Swiss Federal Council decided to amend the ordinance on the reporting procedure in group relationships regarding withholding tax. The notification procedure allows the payment of withholding tax with subsequent refund to be waived in favour of a notification in the group relationship. The new version will come into force on 1 January 2023. How can the changes have a positive impact on Liechtenstein structures with Swiss underlyings and what should be considered?

As crypto-currencies are currently still little regulated and their value fluctuates relatively strongly, this not only entails certain business risks - there are also risks in the audit of the financial statements, for example the valuation uncertainty. If a company holds a significant part of its assets in cryptocurrencies such as Bitcoin or Ethereum, there are several things to consider. In addition to the profession of auditing, specific knowledge about the crypto ecosystem and blockchain is necessary. In the article "Cryptos challenge auditors", Christian Bögli and Michael Merz explain which audit risks exist for companies with cryptocurrencies and how they can be minimised.

Based on a people’s decision of 25 September 2022 the Swiss VAT rates are going to be increased. The increase of the VAT rates is planned to become effective as from 1 January 2024.

As per January 1, 2023, some improvements to the notification procedure for Swiss withholding taxes will enter into force.

The right to deduct import tax is subject to certain legal requirements. In addition, the company must be able to document a claimed import tax deduction. However, despite the principle of free assessment of evidence, not every document related to an import is suitable for proving the claim to an import tax deduction in a legally adequate manner.

The Grant Thornton offices in Schaan, Liechtenstein, have been expanded with a new building directly next to the existing building. In recent years, Grant Thornton Switzerland/Liechtenstein has experienced strong growth. This growth means that we need more space. “With this expansion, we now have the additional space we need and, at the same time, we have created the perfect locations for all of our departments,” explains Rainer Marxer, partner at Grant Thornton. The aim was not only to create more space, but to ensure that it was adapted and optimised to meet modern requirements. At the end of 2021, the project was completed, and the employees in Schaan moved into their new offices on schedule. In Wirtschaftregional, Hanspeter Schreiber, the architect of the new building, and Rainer Marxer discussed the expansion and answered the most important questions the newspaper had about the project. Read more ...

If the employer provides its employee with a business vehicle, which the employee may also use privately, this is deemed to be a supply that is provided by the employer. This supply is subject to the standard VAT rate and must be declared accordingly in the VAT return of the employer.

One way for a company to improve long-term employee retention and to attract new employees is through an employee share scheme. When setting up these schemes, however, caution is required as there are several tax pitfalls. The focus when companies choose these schemes is often on including employees in decision-making and giving them information, with less attention paid to questions about tax. However, the level of tax burden can significantly influence how attractive an employee share scheme is for both the employer and employee. In their article, Michael Rupp and Christian Reichert explain the key points for both sides and use an example to show how the tax burden is calculated in Liechtenstein.

A lot has changed in the working world of a financial auditor due to COVID-19. Meetings via videoconference, travel restrictions, working from home and other remote structures and processes had to be implemented quickly due to the pandemic. Small companies in particular – both auditors and clients – have made significant upgrades to their IT systems during the past 18 months. In addition to working conditions, financial auditors also face additional challenges during the pandemic. Assessing the going concern premise based on lost revenues, liquidity shortages, supply chain issues and production stops during lockdowns is a very challenging task, for example. In her article, Dr Shqiponja Isufi explains how companies can grasp the opportunities presented by the COVID-19 crisis and why a career as a financial auditor is set to become even more attractive for the younger generation.

In a public vote February 13, 2022 a change of current stamp tax law was disapproved with the result that the 1% stamp tax as levied on the issuance of equity of Swiss corporate entities stays in place. Other stamp duties were not being voted on, such as the securities transfer tax, a transaction tax on the sale or purchase of certain securities, as well as the insurance stamp tax, both of which will remain in existence as well.

Mid January 2022 the Swiss Federal Council decided on the basic implementation procedures that will ensure a minimum tax rate of 15% for Swiss based companies that are part of a large multinational enterprise. In essence, first a temporary tax ordinance will be issued, followed by a regular legislation process. The approach with a temporary tax ordinance is seemed to be necessary as legislative processes may take considerable time that stands in contrast with the ambitious timetable as set by OECD on the entry into force of Pillar Two. Even though a temporary tax ordinance is the anticipated way of implementation, an amendment of Switzerland’s constitution, and as such a public vote, will be necessary. The public vote, under the current timetable, is set for June 2023. Current goal is an implementation of the minimum tax for in-scope companies by January 1, 2024.

The number of start-ups continues to rise. When it comes to innovation, Switzerland is a world leader thanks to its renowned universities. The entire innovation process, from the initial idea through to the launch of a marketable product or service, is often a rocky road on which hurdles from the most diverse subject areas have to be overcome. With Grant Thornton as your start-up partner, you benefit from our valuable experience and expertise from day one.