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Roland Böhi

Partner

Finance Director

Position: Partner
Practice Areas: Corporate & M&A , Private Clients , Tax
Field-Display: Banking & Finance Team , Capital Markets Team , Corporate & M&A Team , Employment & Pensions Team , Insolvency & Restructuring Team , Private Clients Team , Real Estate & Construction Team , Tax Maincontact , Management

Dr Roland Böhi is a member of the management committee and head of the Tax Team. He operates in all aspects of tax law. The expertise he has acquired over many years includes international tax law, M&A, corporate finance, real estate, Swiss and international corporate tax (including transfer pricing) and tax consultancy for private clients (including family offices). Roland Böhi advises a broad range of corporate clients from various industry sectors as well as private clients. He also specializes in corporate and commercial law.

E-Mail

+41 44 254 55 55

Linkedin

VCard

Admission to the Bar

Admitted in Switzerland (2003) 

Practice Areas

  • Tax
  • Private Clients
  • Corporate & M&A

Education

  • University of Zurich (Dr. iur., 2014; lic. iur., 2001)
  • Certified Tax Expert (Zurich, 2006)
  • Admitted to the bar (Zurich, 2003)

Languages

  • German
  • English
  • French

Memberships

  • International Bar Association
  • International Fiscal Association
  • Zurich and Swiss Bar Association

Assistant

Lucia Ruf-Grisolia
+41 44 254 55 13
lucia.ruf-grisolia@prager-dreifuss.com

Publications

Subject: Tax
Autor: Roland Böhi, Lukas Scherer, Manuel Vogler
Reading time: 3 Min

Switzerland: Adjustment of the capitalisation rate for determining the earnings value as of 1 January 2021

As of 1 January 2021, the calculation of the capitalisation rate for determining the earnings value was adjusted in Switzerland. What influence will this adjustment have on the Swiss tax landscape?"

Adjustment of the capitalisation rate and specification for start-ups

Against the backdrop of the low interest rate levels and the widely expressed criticism of the so-called practitioner method as a valuation method for determining the fair value of participations of non-listed companies, the Swiss Tax Conference (SSK) adjusted its circular no. 28 of 28 August 2008 (SSK-KS 28) in November 2020. The update concerns the calculation of the capitalisation rate for determining the earnings value as well as a clarification on the practice regarding the valuation of start-ups. What influence do these adjustments have in practice which came into force on 1 January 2021?

Adjustment Calculation of the capitalisation rate

General

In the context of the Swiss wealth tax, the SSK-KS 28 aims to create a uniform valuation of participations of non-listed companies. Generally, the valuation is made according to the so-called practitioner method. In this context, the market value of a participation (U) is determined according to the average of the double-weighted income value (E) and the single-weighted net asset value (S) (U=[2xE+S]/3). The earnings value corresponds to the average net profit of the relevant business years, which is capitalised with the relevant interest rate. Previously, this capitalisation interest rate consisted of the interest rate of risk-free investments as well as a fixed risk premium and amounted normally to 7%.

Based on a report by the University of Zurich, the SSK has now determined that the risk-free interest rate shall be based on the interest rate at which shareholders are willing to invest or take out loans. Under the new rules, the annually determined risk premium is derived from the risk premium of listed companies, considering the specific risks of unlisted companies and illiquidity. All in all, this leads to an increase in the capitalisation rate from previous 7% to approx. 8.8 - 9.3%.

Participation in private assets (non-employee participation)

Due to the higher capitalisation rate since 1 January 2021, the earnings values will inevitably be lower, which leads to a lower market value of the participations in non-listed companies. This is a favourable development, especially since a lower market value results for Swiss wealth tax purposes and the market value is now adjusted to the existing interest rate environment.

Employee participations held as private assets

Monetary benefits from employee participations are generally subject to income tax. The monetary benefit stems from the positive difference between the market value and the actual issue price. In the case of non-listed employee participations, the relevant market value is determined on the basis of a formula (formula value): this formula value is often determined using the practitioner method in accordance with SSK-KS 28. As of 1 January2021, the adjusted capitalisation rate according to SSK-KS 28 will apply to the practitioner method.

In the case of a disposal of employee participations, any excess profit is subject to income tax. The excess profit refers to the difference between the value of the employee participation at the time of sale based on the same formula compared to  the time of acquisition and the actual sale price. The excess gain may arise as a result of a change in the valuation methodology or due to a change of the formula value. If the sale takes place after a 5-year holding period, the excess profit is generally no longer subject to income tax.

Applicable capitalisation rate to existing employee plans?

The increase of the capitalisation rate results in a lower formula value. What would seem to be positive for wealth tax purposes (unlisted employee participations are subject to wealth tax at the formula value) is a double-edged sword when taking into account the income tax perspective: if in the past the practitioner method was used as the relevant formula in existing employee plans, the formula value will now be lower compared to the formula value at the time of allocation. This inevitably leads to an increase in the taxable excess profit and is disadvantageous for the taxpayer. For employee participations issued before 1 January 2021, the question therefore arises which capitalisation rate shall apply to their future sales within the 5-year holding period.

The application of the new capitalisation rate of 8.8 -9.3% at the time of sale would be consistent with the jurisprudence of the Swiss Federal Supreme Court, which states that the principle of legality requires the immediate application of a new practice to all pending cases. However, the principle of legality needs to be balanced against other constitutional principles, such as the protection of trust, which states that the greater the time span between the realisation of a fact and its assessment by the tax authority, the more objectionable the immediate application of a change in practice to all assessments that are not yet legally binding would be.

However, the SSK-KS 28 does not provide for any transitional regulation regarding the adjustment of the capitalisation rate. Furthermore, the formula value for unlisted employee participations only (but at least) renders an approximative fair value. Based on the expert opinion of the University of Zurich, the SSK came to the conclusion that the adjusted capitalisation rate of 8.8 - 9.3% is nearer to reality. Overall, these facts speak in favour of a general application of the new practice to all pending cases.

Details for start-ups

In the case of financing rounds of start-ups, the valuation often differs from valuations according to the practitioner method due to the expected performance of the start-up. As a result, the SSK-KS 28 in the past already provided that one could – in justified cases – deviate from the principle of asset valuation according to the third-party price paid. In the latest version of the SSK-KS 28, it is now explicitly stated that investor prices are not considered during the start-up phase of a company, as there are high valuation uncertainties with regard to start-ups. According to SSK-KS 28, investor prices are therefore only applicable if they are paid after completion of the start-up phase. These clarifications lead to more attractive tax conditions for start-ups as well as to greater legal certainty.

Conclusion

On the one hand, the change in the calculation of the capitalisation rate to determine the capitalised earnings value for the sake of non-listed participations held as private assets is advantageous, as the wealth tax burden will be lower. On the other hand, there are currently some ambiguities in determining the income tax consequences of employee participations held as private assets when they are sold. In particular, it is still unclear which capitalisation rate will be applicable within the 5-year holding period of the employee participations. According to our understanding, the new practice (and thus the lower capitalisation rate) will generally be applied equally to all pending cases and for all associated types of tax. In case of any uncertainties, we recommend that you contact the competent tax authority for clarifications.

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Subject: Tax
Autor: Roland Böhi, Lukas Scherer, Manuel Vogler
Reading time: 3 Min

The revision of Swiss company law and its effects on Swiss tax law

Good things take time? In keeping with this saying, the Swiss Federal Assembly adopted the proposed revision of the company law on 19 June 2020 - after more than twelve years since the publication of the first dispatch. It is scheduled to enter into force on 1 January 2022 at the earliest. What impact will the revision of company law have on the Swiss tax landscape?

Good things take time? In keeping with this saying, the Swiss Federal Assembly adopted the proposed revision of the company law on 19 June 2020 - after more than twelve years since the publication of the first dispatch. It is scheduled to enter into force on 1 January 2022 at the earliest. What impact will the revision of company law have on the Swiss tax landscape?

Scope of the revision

At the center of the revision are, among other things, the introduction of important flexible rules in the area of capital; the participation and control rights of shareholders; the liability under company law; and the new provisions on business rescue. From a Swiss tax perspective, this newsletter deals with the planned innovations to the share capital; especially the tax effects of the introduction of share capital in a foreign currency and the new instrument of the so-called "capital band".

Share capital in foreign currency

In general

Under current law, the financial statements of a Swiss company can already be drawn up in the foreign currency most relevant to the company's business activities (article 958d para. 3 Swiss Code of Obligations "CO"). Until now, however, this has not applied to the share capital. According to the planned revision, the share capital may in future also be denominated in a foreign currency significant from a business activity perspective (article 621 para. 2 CO). This means that capital-related aspects such as dividends, reserves and overindebtedness will also be assessed according to the relevant foreign currency. It is envisaged that the permissible currencies will be Swiss francs, British pounds, Euros, US dollars or Yen. However, the "all or nothing" principle applies, i.e. a mix of currencies is not permitted for share capital.

Corporate tax law consequences

If the financial statement is denominated in a foreign currency, Swiss corporate tax law (article 80 para. 1bis new Direct Federal Tax Act "DFTA" and article 31 para. 3bis new Direct Tax Harmonization Act "DTHA") stipulates that the taxable net profit must be converted into Swiss francs (at the applicable average exchange rate). In the case of tax liability during the year, the average exchange rate for the duration of the tax period during the year will be decisive. With regard to capital tax, a conversion of the taxable equity capital will also be required in accordance with article 31 para. 5 new DTHA, whereby the exchange rate at the end of the tax period must be applied. Accordingly, the determination of taxable profit can thus be carried out in a foreign currency in the future. As a result, the conversion differences between the functional currency and the Swiss franc will no longer occur, as such accounting conversion differences will no longer arise. However, tax will still be levied and collected in Swiss francs (whereby the exchange rate at the end of the tax period will be determinant).

The introduction of share capital in foreign currencies will be particularly interesting for companies mainly operating in markets in which one of the recognized currencies is applicable.

The new instrument of the capital band

In general

The introduction of the capital band aims to increase the flexibility of the capital regulations of companies. For this reason, the board of directors can in future be authorized in the articles of association to increase or reduce the share capital by up to 50 %, depending on necessity. The capital band will be valid for a maximum period of five years. After this period, the basis for a new capital band would have to be created by amending the articles of association.

With the capital band, the general meeting can significantly broaden the board of directors' scope and flexibility in equity financing as required.

Income tax consequences for private shareholders?

From an income tax perspective, it is envisaged that capital contributions within the framework of a capital band shall only qualify as capital contribution reserves to the extent that they exceed the repayment of any free reserves within the capital band (article 20 para. 4 new DFTA or article 7b para. 2 new DTHA). The assessment whether new or additional capital contribution reserves exist will therefore only be made upon termination of the capital band. If, at the ending of the capital band, the capital contributions exceed the distributions, tax reserves from capital contributions (subject to withholding tax) can be formed and confirmed by the Federal Tax Administration ("FTA") with effect for income and withholding tax. The legislator has made this adjustment in order to prevent listed companies from being able to form capital contribution reserves for natural persons resident in Switzerland who hold shares as private assets without any de facto restrictions (by setting up a separate trading line at the Swiss stock exchange SIX). For individuals who hold shares in non-listed companies as private assets, however, this change in the law has negative tax consequences in the event of a capital reduction. Since the FTA only confirms new capital contribution reserves upon termination of the capital band, there may be no confirmed capital contribution reserves at the time of the capital reduction, which is why income tax consequences may not be averted for the shareholders concerned. The future practice will show, how this problem can be prevented (e.g. by buying back own shares). Otherwise, the two-way capital band for privately held companies will become dead letter.

Issuance stamp duty (Emissionsabgabe)

The planned amendments to the Federal Act on Stamp Duty provide that the issuance stamp duty on equity securities issued within the scope of a capital band will only be due at the termination of the capital band and not already with each individual capital increase. Further, stamp duty will  only be levied on the net increase in equity capital. Consequently, no issuance tax will become due if the capital inflows do not exceed the repayments within the same capital band.

Conclusion

In connection with the entry into force of the revision of company law, tax changes are evidently occurring, some of which (still) leading to ambiguities and irregularities. It will be decisive how the practice will react to these challenges, because the jury is still out.

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Subject: Tax
Autor: Roland Böhi, Lukas Scherer
Paper: NZZ
Reading time: 5 Min

The pandemic from a Swiss tax law perspective

Are the financial measures taken in connection with the Covid-19 pandemic a curse or a blessing for SMEs in terms of taxation? Either way there are several sheet anchors."  By Dr. Roland Böhi and Lukas Scherer in NZZ 12 March 2021

Subject: Tax
Autor: Roland Böhi, Nicole Fröhlich
Paper: PD Newsletter
Reading time: 3 Min

Tax domicile of legal entities – not always so clear

It is not always clear, where the primary tax domicile of a legal entity is. This question, however, can have great significance in the light of the considerable differences in taxation levels between cantons or jurisdictions.

In Switzerland, legal entities are subject to unlimited taxation in the canton in which they have their legal seat or place of effective management (primary tax domicile). These two alternative nexuses can lead to situations in which it is not clear which canton or jurisdiction can claim the right to unlimited taxation of a legal entity – a question which can have great significance in the light of the considerable differences in taxation levels between cantons or jurisdictions.

I. Unlimited right to tax

1. Principle

Under Switzerland's national as well as international tax law, a legal entity is subject to unlimited taxation in Switzerland, if its legal seat (place of incorporation) or its place of  effective management is in Switzerland (personal nexus).
 

a) Inter-cantonal tax law

According to Swiss law, where a legal entity's seat and its place of effective management are in different cantons, and therefore more than one canton claims a right to unlimited taxation, the resulting conflict has to be resolved pursuant to the rules concerning the constitutional prohibition of the inter-cantonal double taxation.
In its decision 2C_627/2017 of 1 February 2019, the Swiss Supreme Court for the first time ruled that in such cases a legal entity's primary tax domicile and accordingly also the place of unlimited taxation, will always and exclusively be the place of effective management.
 

 

b) International tax law

Under international tax law, residency conflicts have to be resolved based on the applicable double taxation treaty. In Switzerland's double taxation treaties, the conflict is usually resolved in favor of the place of effective management, if two jurisdictions claim an unlimited taxation right.

2. Place of effective management under Swiss inter-cantonal tax law

According to the jurisprudence of the Swiss Supreme Court, a legal entity's place of effective management is where its economic and effective interests are focused. The decisive question is therefore, where the usual business – in line with the entity's business purpose, is run. If the business is run from more than one place, it is crucial where the entity's management is carried out predominantly. The term «effective management» refers to the place where key management decisions which are necessary for the conduct of the entity's business are made in substance. «Effective management» needs to be distinguished from mere administrative tasks on the one hand and from activities carried out by the most senior persons on the other, as long as these are limited to controlling the effective management and making fundamental decisions only. The place where the board of directors' meetings are held is of minor importance only. Equally, the places, where general assemblies are held or the shareholders reside is not decisive. Nevertheless, the residency of the person who is in charge of the effective management can play an important role, if the effective management is essentially performed by one person in various places, without the legal entity having a fixed place of business or its own staff. Such constellations have to be considered carefully, even if the managing person's place of residence should only ever be decisive, if no other place of effective management, at which the necessary tasks are regularly carried out, can be proven.

3. Burden of proof

As a general rule, the tax authority claiming a right to taxation has to prove the facts for such taxation right. Therefore, the tax authority claiming a right to unlimited taxation has to demonstrate and prove that a legal entity meets the requirements for unlimited taxation.
To prove a legal entity's legal seat, the respective entry in the commercial register is sufficient.
If the cantonal tax authorities claim their right to unlimited taxation based on a legal entity's place of effective management, however, they have to demonstrate the circumstances based on which they conclude that a legal entity's seat is of a formal nature only and not the place where the effective management is carried out.

4. Limited right to tax

If the cantonal tax authorities do not succeed in demonstrating that an entity's place of effective management is in their canton, it can still claim a right to limited taxation based on an economic link, such as a permanent establishment or a fixed place of business.
Depending on the factors to be allocated to such a permanent establishment or fixed place of business, the canton of the secondary tax domicile with its limited right to tax may nevertheless get to tax a predominant part of the profit and capital of a tax payer.

II. Remarks on procedural law

To appeal against a case of inter-cantonal double taxation at the Supreme Court, it is not necessary for the entity to obtain decisions from the highest cantonal courts of both cantons claiming a right to tax – one such decision from the highest cantonal court is sufficient to appeal against the tax assessments of both cantons.
However, a legal entity has to ensure that it does not forfeit its right to appeal against a final cantonal tax assessment. If a legal entity, knowing of the conflicting tax claim of another canton, submits to a tax assessment without reservations, it may forfeit its right to appeal against this tax assessment. In particular, this is the case if it files a tax return in such canton without reservation, pays tax bills without reservation and does not appeal or take any legal remedies against the tax assessment.
Further, an entity forfeits its right to appeal if it acts in bad faith, i.e. if it knows about a conflicting tax claim of another canton and still does not mention this in the tax return. Such behavior may lead to effective double taxation.

III. Conclusion

With tax rates being lowered as a result of the corporate tax reform adopted last year and tax revenue expected to decline in the wake of the economic downturn caused by the Covid-pandemic, it may be expected that cantonal tax administrations will try to find ways to intensify their efforts to claim a right to (un)limited taxation in the future.
Planning management capacities and reviewing operational activities can help to avoid unpleasant tax repercussions.
If you have questions regarding your tax domicile, our tax team will be happy to support you.

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Subject: Tax
Autor: Roland Böhi, Lukas Scherer
Reading time: 3 Min

Standardisation of the practice of employee benefit plans throughout Switzerland

The practice regarding the tax treatment of employee benefit plans will undergo three major changes with effect from 1 January 2021. Are these changes also applicable to existing employee benefit plans?

The practice regarding the tax treatment of employee benefit plans will be subject to the following three significant changes effective as of 1 January 2021. The practice update is stipulated in the new version of the circular letter of the Swiss Federal Tax Administration and is the result of the motion 17.3261 of the National Council Commission for Economic Affairs and Taxes (WAK-N) "Competitive tax treatment of start-ups including their employee shares".

1. In the absence of a fair market value, the corporate valuation must be carried out using a suitable and recognized method and the (tax-relevant) fair market value can be determined in the same way as for wealth tax purposes

As from 1 January 2021, non-listed companies implementing an employee benefit plan will be valued based on the so-called practitioner method ((2x earnings value + 1x net asset value) divided by 3). Depending on the canton, other assessment approaches may also be applicable for companies that meet the qualifications of start-ups. Irrespective of this change in practice, companies can still apply a valuation using their own methodology (e.g. an EBITDA multiple), provided that (i) the formula plausibly reflects the business model, (ii) it is comprehensible and (iii) it is accepted in advance by the relevant cantonal tax authorities as "suitable and approved". It is advisable to ensure the acceptance of a separate valuation formula by means of an advance tax ruling.

2. National-wide possibility of a tax-free capital gain after a 5-year holding period

The bad news first: nothing changes for employees and companies operating in Zurich. What previously applied only in the Canton of Zurich will apply throughout Switzerland as from 1 January 2021. After a 5-year holding period, any surplus profit (difference between the value based on the same formula as at the time of allocation and the sales price) will no longer be subject to tax. Thus, the entire difference between the value at the time of granting the shares and the latter sales price qualifies as a tax-free capital gain, save for taxation of violations of the blocking-period in years n6-n10.

This tax exemption for capital gains in principle only applies for sales to third parties. The 5-year holding period remains irrelevant for re-sales to the company or its shareholders, and any surplus profit is subject to income tax and social security contributions in the cantons in question.

The change of practice will undoubtedly apply to new employee benefit plans throughout Switzerland. In a perfect world, the same rules would also be applicable to existing employee benefit plans. Unfortunately – as a result of the Swiss federal system – this is not the case. Depending on the canton, there are different opinions as to how the new nationally applicable 5-year holding period shall apply to existing employee benefit plans. Companies affected will most likely not be able to avoid getting in touch with the relevant cantonal tax authorities to resolve this ambiguity.

3. Shares acquired at third-party conditions or subscribed for during incorporation do not qualify as employee shares

If employees acquire shares of the company at the same terms and conditions as those applicable to third-party investors, their shares do not qualify as employee shares. The same applies to shares acquired by shareholders (so-called "founding shareholders") in the course of the incorporation of the company. Future capital gains realized on such sales are therefore entirely tax-free, irrespective of whether the sale is made to third parties, to the company or to shareholders. However, this requires that no discount due to the blocking period is granted when allocating of the shares.

However, other aspects of the tax authorities' intervention against the tax-free capital gain, such as the qualification of the shares as business assets or the qualification of the employee or founding shareholder as a professional securities dealer, must be considered.

The changes of the practice are highly welcomed. Nevertheless, the effects on existing employee share plans are ambiguous owing to the lack of clear transitional provisions. It is therefore worthwhile for affected employees and employers to consult their tax advisor as soon as possible.

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Subject: Tax
Autor: Roland Böhi, Lukas Scherer
Paper: NZZ

How can companies benefit from the tax reform?

In the 5th October 2020 issue of NZZ, Roland Böhi and Lukas Scherer shed light on the tax reform measures of the patent box and the super-deduction for research and development expenses for the tax promotion of innovation in Switzerland which came into force in January 2020. The authors show that it can be worthwhile not only for large companies. Even for SMEs and start-ups, attractive options for tax savings arise, also in the software sector.

Subject: Tax
Autor: Roland Böhi, Nicole Fröhlich
Paper: PD Newsletter

Residency for tax purposes (individuals)

The place of an individual’s tax residence for national tax purposes can be controversial if a person has permanent homes available to himself in more than one canton in Switzerland. A short presentation of some frequent constellations.

Subject: Tax
Autor: Roland Böhi, Lukas Scherer, Manuel Vogler
Paper: PD Tax Newsletter

eSports and taxes

eSports – the competitive playing of computer and video games is enjoying growing popularity in Switzerland. So far, this phenomenon has not yet been given much attention in the Swiss tax environment. Our article flags open questions and provides possible solutions for eSports athletes as well as for eSports organisations.

Subject: Tax
Autor: Roland Böhi, Lukas Scherer, Manuel Vogler

The implementation of the patent box

Covid-19 and the related tax issues have been omnipresent in the Swiss tax landscape in recent months. The entry into force of the corporate tax reform (so-called TRAF) and the measures associated with it have inevitably been overshadowed by the Covid-19 pandemic. Nevertheless, companies have been able to profit from various TRAF measures as of 1 January this year. The patent box is one of those measures. Mid way through the first year of application, it seems like a good time to take a closer look at this measure in more detail.

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Subject: Loans / Covid 19
Autor: Roland Böhi, Nicole Fröhlich, Lukas Scherer, Manuel Vogler, Laura Bartesaghi
Paper: PD Tax Newsletter

Tax consequences of coronavirus for employees and companies

The Corona Pandemic confronts us all with new and unknown challenges. In order to make a small contribution to overcoming the current situation, the Tax Team describes certain tax implications of the coronavirus for both employees and employers and summarises the latest tax measures of the Swiss Federation and the cantons in connection with the coronavirus.

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Subject: Tax
Autor: Roland Böhi
Paper: NZZ

New article about a tax-efficient reorganization of real estate from the business unit which is for sale

In his latest article our tax partner Roland Böhi explains how an entrepreneur can reorganize his business with real estate so that the tax consequences are minimised when the business unit is subsequently sold and the real estate portfolio is still available to him as a capital investment. The article was published in Neue Zürcher Zeitung (German).

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Subject: Tax
Autor: Roland Böhi, Lukas Scherer, Manuel Vogler
Paper: PD Tax Newsletter

Additional deduction on research and development activities

The R&D super-deduction is an attractive tax measure which is not only favourable for companies but will also promote Switzerland as an international hub for innovation. Our publication deals with the key aspects of this tax measure.

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Subject: Tax
Autor: Roland Böhi, Lukas Scherer

The abolishment of holding company status: Measures to mitigate the tax burden

The Federal Act on Tax Reform and AHV Financing (TRAF) abolished cantonal tax privileges for holding, domicile and mixed companies. Roland Böhi and Lukas Scherer of Prager Dreifuss analyse the impact of the reform and assess the transitional measures set up to alleviate an additional tax burden.

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Subject: Tax
Autor: Roland Böhi, Nicole Fröhlich
Paper: PD Newsletter

Tax-exempt private capital gains subject to increasing restrictions

Generally, private capital gains are tax-exempt in Switzerland. However, this principle is subject to restrictions which seem to be getting more and more strict.

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Subject: Tax
Autor: Roland Böhi, Nicole Fröhlich
Paper: PD Tax Newsletter

Tax loss allocation in real estate companies - clarification by the Federal Supreme Court

Tax losses incurred by a real estate company in secondary tax domiciles are to be borne by the primary tax domicile in the first place. Losses exceeding the profit at the primary tax domicile are to be allocated proportionally to the other secondary tax domiciles. The Federal Supreme Court recently made a new ruling.

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Subject: Tax
Autor: Roland Böhi, Lukas Scherer, Manuel Vogler
Paper: PD Tax Newsletter

Amended protocol of double taxation agreement between Switzerland and USA

On 20 September 2019, Switzerland and the USA ratified the protocol of amendment of their double taxation treaty. The implemented protocol is intended to mark "a milestone" in the cross-border tax relationship between the two countries and permits now the full exchanges of information between Switzerland and the US.

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Subject: Tax
Autor: Roland Böhi, Peter Hongler (Walder Wyss AG)
Paper: IFA 2019 London Congress, Cahiers

Tax Newsletter September 2019 - IFA country report 2019: Analysis of Swiss interest deductibility restrictions from the perspective of BEPS Action 4

As part of the IFA Congress 2019 held in London, the authors discuss BEPS Action 4 (interest deductibility) and its implementation in Switzerland. Interest limitation rules, as the ones proposed in BEPS Action 4 or ruled in the ATAD of the European Union, have not been discussed intensively in Switzerland. Nevertheless, Switzerland has known thin capitalisation rules for more than 20 years and has established own regulations to prevent base erosion and profit shifting. As far as the authors observe, there is no intention by the Swiss legislator to change the current rules and implement new ones.

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Subject: Tax
Autor: Roland Böhi, Manuel Vogler
Paper: IFLR

Tax Summer Update: Revised Swiss corporate tax reform and required actions to benefit

The Swiss electorate recently approved the long awaited Swiss Corporate Tax overhaul. In this IFLR article, the Prager Dreifuss tax team describes its various measures and how the tax reform will be implemented on a cantonal level.

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Subject: Tax
Autor: Roland Böhi, Manuel Vogler, Danielle Wenger
Paper: PD Newsletter

New ruling regarding joint and several tax liability of directors

The tax team discusses a new ruling of the Swiss Federal Supreme Court regarding the joint and several tax liability of board members in case of a factual liquidation and its impact.

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Subject: Tax
Autor: Roland Böhi, Nicole Fröhlich, Danielle Wenger
Paper: PD Tax Newsletter

Tax Newsletter April 2019: Implementation of Multilateral Instrument (MLI) in Switzerland

As part of the BEPS Project, the OECD has developed the Multilateral Instrument (MLI) to efficiently modify a large number of bilateral tax treaties. Switzerland has signed the MLI and it has been ratified by the Parliament on 22 March 2019. 

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Subject: Tax
Autor: Roland Böhi
Paper: NZZ

Avoidance of tax costs in corporate successions

Set the course on time in order to avoid tax costs in corporate successions

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Subject: Tax
Autor: Roland Böhi, Danielle Wenger
Paper: PD Newsletter

International Debt Financings of Swiss Headquartered Groups Become Even More Attractive

International debt financings of Swiss headquartered groups become even more attractive pursuant to a recently announced clarification of the practice applied by the Swiss Federal Tax Administration

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Subject: Tax
Autor: Roland Böhi, Manuel Vogler, Danielle Wenger
Paper: PD Newsletter

Tax Newsletter / January 2019: new and well-known tax traps in corporate succession

Subject: Tax
Autor: Roland Böhi, Manuel Vogler, Danielle Wenger
Paper: PD Tax Newsletter

Tax Newsletter Dezember 2018: Besteuerung von Blockchain und Kryptowährung

Das Tax Team bespricht die Besteuerung eines Initial Coin Offerings anhand eines Fallbeispieles.

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Subject: Tax
Autor: Roland Böhi, Manuel Vogler, Danielle Wenger
Paper: PD Tax Newsletter

Tax Newsletter November 2018: Revised Swiss corporate tax reform

Revised Swiss corporate tax reform will keep Switzerland a top corporate location – a brief overview.

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Subject: Tax
Autor: Roland Böhi, Nicole Fröhlich, Danielle Wenger
Paper: PD Tax Newsletter

Tax Newsletter March 2018:

Subject: Tax
Autor: Roland Böhi, Danielle Wenger, Stefan A. Wandel
Paper: PD Newsletter

Tax Newsletter February 2018: Reform of the U.S. Tax Regime – The Swiss Perspective

Prager Dreifuss takes a closer look at international linkages of the recent U.S. tax reform and analyzes the major challenges ahead for individuals as well as multinational corporations in Switzerland.

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Autor: Roland Böhi, Danielle Wenger, Stefan A. Wandel
Paper: PD Tax Newsletter

Tax Newsletter December 2017: Taxation of Initial Coin Offerings in Switzerland

Prager Dreifuss breaks down the taxation models applied to Initial Coin Offerings to help give you a better sense of the current Swiss fiscal regulatory spectrum.

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Autor: Roland Böhi, Danielle Wenger, Laura Oegerli
Paper: PD Newsletter

Tax Newsletter November 2017: Country-by-Country Reporting for Multinational Corporations and Automatic Exchange of Information of Financial Data as of 1.1.2018

As of 1.1.2018, multinational corporations will be obliged to generate country-by-country reports. Further, certain financial data will be subject to the automatic exchange of information as of 1.1.2018.

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Autor: Roland Böhi, Danielle Wenger, Laura Oegerli
Paper: PD Newsletter

Newsletter October 2017: New Provisions as of 1.1.2018 in the Swiss Federal Act on Value Added Tax

Revision of the Swiss VAT: Switzerland expands VAT liability for foreign companies and e-commerce providers and reduces the VAT rate by 0.3%.

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Autor: Roland Böhi, Danielle Wenger
Paper: PD Newsletter

Newsletter May 2017: Flat-rate Taxation for high-net-worth individuals

Foreign nationals resident in Switzerland can be taxed on a lump-sum (flat-rate) basis if they are not gainfully employed in Switzerland. This taxation is based on the taxpayers’ actual annual living expenses rather than on their income and assets and offers attractive tax planning opportunities.

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Autor: Roland Böhi, Danielle Wenger
Paper: PD Newsletter

Newsletter April 2017: Spontaneous exchange of information of tax rulings as of 1.1.2018

Switzerland implements BEPS action point 5 and will exchange particular tax ruling information as of 2018 with partner states by means of spontaneous exchange of information.

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Autor: Roland Böhi, Danielle Wenger
Paper: PD Newsletter

Newsletter March 2017: Double Taxation Treaty Switzerland - Liechtenstein, entered into force on January 1, 2017

The first tax treaty between Switzerland and the Principality of Liechtenstein simplifies the cross-border business from a tax point of view.

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Autor: Roland Böhi, Danielle Wenger
Paper: PD Tax Newsletter

Newsletter - February 2017: 30-day Notification Period for Intercompany Dividends Eased – Assessment of Repayment Claims Relating to Withholding Taxes Paid and Default Interests Paid is Necessary

30-day notification period for intercompany dividends eased – assessment of repayment claims relating to withholding taxes paid and default interests paid is necessary

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Autor: Roland Böhi, Anna Eldring
Paper: Expert Focus

Restructuring Merger with minority Shareholders

Dr. Roland Böhi explains the tax implications of a restructuring merger between sister companies in a situation where minority shareholders  now hold shares in the merged company in exchange for restructuring measures.

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Autor: Roland Böhi
Paper: IFF Forum für Steuerrecht

Undercapitalization or Deemed Equity?

Dr. Roland Böhi analyses the Swiss legal basis to prevent undercapitalization. Referring to a recent decision of the Swiss Supreme Court, he demonstrates inconsistencies between legislation and tax practice which result from the legal obligation to make an economic distinction between equity and debt financing. On the basis of the Best Practice of the OECD/G20 within the framework of the BEPS Action 4 measures, he shows if and how a so-called "interest barrier" could be a viable remedy in Switzerland.

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Autor: Roland Böhi
Paper: Der Schweizer Treuhänder

Indirect Financial Loss within a Corporate Group

The article of Dr. Roland Böhi discusses which risks arise from an indirect distribution of profits of a subsidiary to its grandparent company or to an affiliate. In particular, the article focuses on tax consequences for the Swiss tax subjects.

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Autor: Roland Böhi
Paper: Der Schweizer Treuhänder

Employee Participations - Qualification of the Remuneration on the Disposal of Shares

In practice, there is often a problem of a satisfactory distinction between tax-exempt private capital gains and taxable income from taxable employment in case of disposal of employee participations held as private assets. Dr. Roland Böhi presents the general basics of employee participations and elaborates on the tax issues surrounding this topic.

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Autor: Roland Böhi
Paper: Steuerrevue

Merger Gains and Losses: Accounting and Tax Issues Part 1

In the Steuerrevue, Dr. Roland Böhi explains how merger gains and –losses are managed in cases of an up-stream merger, down-stream merger and a merger of two sister companies. He expands on accounting, commercial law and tax law issues.

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Autor: Roland Böhi
Paper: Steuerrevue

Merger Gains and Losses: Accounting and Tax Issues Part Two

In the Steuerrevue, Dr. Roland Böhi explains how merger gains and –losses are managed in cases of an up-stream merger, and down-stream merger and a merger of two sister companies. He expands on accounting, commercial law and tax law issues.

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Autor: Roland Böhi
Paper: Der Schweizer Treuhänder

Updated Review on the Determination of Deemed Equity

The distinction between equity capital and loan capital is still relevant from a tax point of view when choosing external financing. Since 1995, the reclassification from loan- to equity capital is regulated by law. The administrative application of this legislation is challenging and bears pitfalls when applied in specific cases. In this essay, Dr. Roland Böhi demonstrates how deemed equity can appropriately be assessed.

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