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. The Swiss government therefore estimated that the loss in tax revenue from the abolishing should not exceed CHF 250 million. The proposal does however not abolish the securities transfer stamp tax and the stamp tax on insurance premiums.
Entry into force and referendum vote
The stamp tax is intended to be abolished already as of 1 January 2022. However, the social democratic party has already announced that it intends to launch a popular referendum vote. It therefore remains to be seen whether a referendum vote will support the proposal which has the approval of both a parliamentary majority as well as the Swiss federal government. The abolishing of the tax would provide an additional incentive for equity investments and would facilitate funding also through convertible debt.
Get in touch
Should you have any questions on the above, please do not hesitate to contact Fabian Sutter or Beat Baumgartner.