Swiss Parliament Intends To Abolish Equity Stamp Tax

• Published date: 28 June 2021
• Subject Matter: Tax, Inheritance Tax, Tax Authorities
• Law Firm: Loyens & Loeff
• Author: Mr Fabian Sutter and Beat Baumgartner

On Friday 18 June 2021, the Swiss parliament accepted a bill which would see the Swiss issuance stamp tax on equity contributions abolished as per 1 January 2022.

Background

Switzerland levies a 1% stamp tax on equity contributions (Emissionsabgabe, droit de timbre d'émission), meaning any increase in equity through the issuance of shares or by way of contributions to reserves against no consideration triggers a stamp tax. Although the issuance stamp tax has been the object to continued criticism for setting unnecessary incentives to provide debt funding to Swiss companies, parliament has so far unsuccessfully tried to abolish the tax - even though in practice the tax could in most cases easily be prevented. The abolishing of the issuance stamp tax was initially supposed to be part of the recently enacted Swiss corporate tax reform (TRAF) and has now been approved in a separate bill through a parliamentary initiative (09.503). With the pandemic, the need to provide taxpayers with the possibility to attract equity funding without triggering an unnecessary tax burden has increased and now allowed parliament to find the required majority. The stamp tax itself created tax revenues of merely approx. CHF 170-180 million on the past two years...