Session recaps

This is an automatic translation, which is why errors may occur
National Council

21.073 Double taxation. Agreement with North Macedonia
21.074 Double taxation. Agreement with Japan

In the first week of the session, the Grand Chamber dealt with two DTA amendment protocols.

The protocol with North Macedonia(21.073) contains an implementation of the BEPS minimum standards, an abuse clause and the adaptation of the provision on the exchange of information in accordance with the international standard on the exchange of information on request.

The bill was unanimously approved in the National Council by 181 votes.

The protocol with Japan(21.074) also provides for implementation of the BEPS minimum standards and an abuse clause. It also contains the revision of some provisions (e.g. dividends, interest, international traffic and corporate profits), taking into account the current agreement policy of the two contracting parties.

The amending protocol with Japan was approved by 134 votes to 41 with 6 abstentions.

SwissHoldings supported the adjustments to the DTAs in advance.

The two bills will now go to the Council of States, where they will be pre-considered by the WAK-SR on April 25, 2022.

21.480 Pa. Iv. APK-NR. Federal Act on the Continuation and Facilitation of Relations between the Swiss Confederation and the European Union

The Parliamentary Initiative of the APK-N demands that the Federal Council, within the framework of the structured political dialogue with the EU and in order to safeguard Switzerland’s interests, should seek to clarify the institutional rules for the continuation and facilitation of relations with the European Union. The benchmarks for the dialogue as well as the role and involvement of parliament and the cantons should be set out in a federal law.

While the APK-N approved the initiative on 25.06.2021 and passed a resolution to prepare a draft decree for a federal law, its sister commission APK-S on 15.10.2021 did not follow up on Pa. Iv. did not follow up. In the current session, the National Council has dealt with the matter and approved the request. Thus, the initiative will again be dealt with by the APK-S and then by the full Council. If the Council of States does not follow the initiative, the matter will be written off.

While the proponents of the Pa. Iv. are particularly concerned with casting an overall approach to clarifying the institutional issues in a law, the defeated minority of the National Council is of the opinion that such a decree would restrict the Federal Council’s ability to act too much.


Council of States

16.438 Pa.Iv. Appropriate remuneration and a stop to wage excesses at federal and federally affiliated companies

In the first week of the session, the Council of States rejected for the second time, by 27 votes to 13 with 1 abstention, the proposal to introduce a salary cap of CHF 1 million at federal companies. The proposal was initiated by former SP National Councilor Susanne Leutenegger Oberholzer (BL) in 2016 with a parliamentary initiative. Several reports on the topic followed.

With the renewed failure of the Council of States to act, the matter is now definitively closed and off the table.

The two chambers were not unanimous in their support for the bill: while the issue was approved in the National Council, the Council of States was consistently more critical. In the small chamber, it was argued that the objectives of the bill, namely to ensure appropriate remuneration and to stop excessive pay, could not be achieved with the law from the National Council. The companies were too different in terms of structure, legal form and tasks to be lumped together. Appropriate remuneration could not be ensured with a rigid upper limit, said commission spokesman Stefan Engler.

SwissHoldings welcomes the fact that the deal is now off the table.

18.3718 Mo. National Council (WAK-NR). Calculation of the participation deduction (prevention of an additional profit tax burden resulting from the issuance of financial instruments by the group parent company and the intra-group transfer of the funds from these instruments)

The motion instructs the Federal Council to adjust the calculation of the participation deduction so that all sectors can benefit from the mechanism, which currently only applies to systemically important banks.

After the National Council had already approved the request in the fall session by 101 votes to 75 with 8 abstentions, the Council of States has now also adopted the motion by 22 votes to 18 with 2 abstentions.

SwissHoldings welcomes the adoption of the motion

Switzerland recently rejected the abolition of the issue tax on equity.

It thus provides for higher taxation on the issuance of financial instruments by the group parent company and the intra-group transfer of the funds from these instruments compared to other locations, which can lead to double taxation for the companies concerned. This double taxation would be eliminated by adjusting the participation deduction. In addition, systemically important banks are currently privileged compared to other sectors with regard to the participation deduction, which is not compatible with the principle of taxation according to economic performance and leads to market distortions.

18.4292 Maintaining proportionality. Stop enforcement harassment in the notification procedure for withholding tax

In the last week of the session, the Council of States rejected, without opposition, a motion that would have instructed the Federal Council, within the scope of its executive authority – for example by issuing directives – to ensure proportionality in the implementation of the notification procedure for withholding tax.

SwissHoldings regrets this decision.

In the opinion of a significant number of our member companies, the practice regarding the withholding tax reporting procedure poses a problem. Also according to our experts, the Federal Tax Administration opens criminal proceedings and imposes fines very quickly. In some cases, it is not even possible to comply with the strict timelines set by the FTA. If, for example, the FTA is of the opinion that a transfer price for a good or service should be set higher or lower between two Swiss group companies, it often imposes an additional fine because the withholding tax report was not submitted on time. The fact that there is a great deal of discretion in the area of setting transfer prices and that the price set by the administration does not have to be more accurate than that of the company is irrelevant.


Both councils

22.008 Foreign economic policy 2021. report

The Federal Council adopted the Foreign Economic Policy 2021 Report on January 26, 2022. The foreign economic report provides an overview of Switzerland’s foreign economic policy developments in the year under review.

The key chapter this year is devoted to the consequences of the Covid 19 pandemic for developing and emerging countries, which have been hit hard by the pandemic economically in addition to the health challenges. Other topics covered include an analysis of economic policy developments in Switzerland with regard to foreign trade and ongoing open policy work in this regard, such as the formulation of investment controls, the regulation of bilateral relations with the EU, relations with various multilateral organizations (WTO, OECD, G20, ILO, etc.), ongoing negotiations of free trade agreements, various initiatives of the Confederation with regard to sustainability, aspects of further development in economic development cooperation, and the monitoring of export controls, sanctions and arms policy in general.

For the coming year, the Federal Council is setting its thematic priorities on mitigating the consequences of the Covid crisis in the context of both development cooperation and trade policy. The focus will also be on relations with the EU, ensuring an internationally coordinated approach to data protection, the further development of multilateral and bilateral relations, and the topic of foreign economic policy and sustainability.

The Council of States took unanimous note of the report. The National Council also took note of the report and rejected the motion of a minority to refer Chapter 4 back to the Federal Council.


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