Switzerland Unveils Share Scheme Tax Rules

By ExpatBriefing.com Editorial 20 June, 2011

Switzerland’s law pertaining to the taxation of employee participation is due to enter into force in the Confederation on January 1, 2013. According to the Swiss federal administration, the precise date was determined in consultation with the cantons after the referendum deadline expired unused.

The Swiss administration notes in its release that the new provisions provide that as regards direct federal taxation and cantonal income tax, both employee shares and listed unrestricted tradable employee options will be taxed at the point of acquisition. Non-listed employee options will in future be taxed at the point of exercise under the new regulations, the administration continues.

While owners of non-listed employee options may be resident and active in other states in the period between purchase and exercise, the administration states that if the individual was resident in Switzerland for some of that time, then a proportional tax will be due. If, however, the individual is resident abroad at the point of exercise, a withholding tax will be imposed, it adds, explaining that as regards direct federal tax, a withholding tax rate of 11.5% will be applied. Given the autonomy of the cantons in Switzerland, cantonal withholding tax rates may vary, the administration points out.

The law pertaining to the taxation of employee participation was adopted by both the National and State Council on December 17, 2010.

A comprehensive report in our Intelligence Report series devoted to a study of the ways in which expatriate executives and employees can optimise their remuneration and taxation situations in a number of the main English-speaking countries is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report10.asp

Tags: Individuals | Expatriates | Tax | Investment | Business | Law | Share Schemes | Equity Investment | Offshore | Tax Rates | Withholding Tax | Switzerland | Regulation |


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