Focus issue "Implementation of the TRAF"

The Bucher Tax AG has written an article in the special issue of the Center for Swiss and International Tax Law [zsis)] on the implementation of the TRAF throughout Switzerland. The article is called "Overview of the implementation of the TRAF at federal and cantonal level".

Quick Read

This article is a summary of the origins and background of the federal law on tax reform and AHV financing (TRAF). The article describes the measures associated with the TRAF and contains a large overview table with a nationwide comparison of implementations in the individual cantons.

The TRAF was launched on 1 January 2020 and has a long history. It dates back to 2005, when the EU unilaterally decided that the cantonal tax regime for status companies violates the Free Trade Agreement between Switzerland and the EU. In addition to the EU, the OECD also demanded in the BEPS project that Switzerland abolishes special rules for individual capital companies.

The first revision project of the Federal Council and Parliament (USR III) failed in the referendum of 12 February 2017. Since the adjustment of the tax rules criticised by foreign countries was undisputed, the Federal Council and parliament quickly drew up a new bill, which was approved by parliament under the name TRAF and adopted by the people on 19 May 2019.

In terms of content, the TRAF basically covers the topics that have been in the foreground since the beginning of the discussion on the adaptation of the corporate tax law in 2005, namely the abolition of the special tax regimes. In addition, in the planning of the proposal, the search was always on for ways to maintain Switzerland's internationally recognised attractiveness as a "tax location". Above all, this area of conflict has led to new regulations in connection with the promotion of innovation, i.e. the instruments of patent box and additional research and development deductions (R&D deductions) stood out. The other elements of the bill are partly political special interests (deductions for self-financing) and the compensation for the possible costs arising from the abolition of the special regimes and the associated cantonal profit tax reductions (restrictions on the nuclear power plant; increase in the taxation of dividends; limitation of relief; increase in the federal contribution to direct federal taxes paid to the cantons).


To the entire focus issue "Implementation TRAF"; zsis)-Newsletter October 2020

To the website of the zsis)