Answer ... Foreign companies with a permanent establishment or real estate in Switzerland are subject to limited liability to Swiss tax. Should a company with its seat abroad be considered as effectively managed from Switzerland, an unlimited liability to Swiss tax will arise.

Answer ... A Swiss withholding tax of 35% applies to dividend distributions to shareholders and interest payments to bond holders by Swiss companies. A total or partial refund can be sought before the Federal Tax Administration based on any applicable tax treaty. Switzerland’s treaty network includes over 100 double tax conventions.

Answer ... The Swiss authorities are required by the Swiss Constitution to observe international law. Although there are no rules on conflicts between provisions of Swiss law and international law, international law takes precedence over domestic law.

Answer ... Where a foreign withholding tax is levied on income paid to a Swiss company, the latter can claim a tax credit only if the applicable double tax treaty so provides. In the absence of a treaty, some cantons may allow for the deduction of foreign tax paid.

Answer ... Under the upcoming reform, companies migrating to Switzerland will be eligible for a step up in basis, whereby assets are revalued at fair market value with no Swiss corporate income tax consequences. Thus, the basis for depreciations and/or for future disposals is higher. Depending on the facts at hand, there is also potential to create capital contribution reserves, which could be distributed free of tax.

Answer ... The transfer of a company’s seat or effective management out of Switzerland is equated to liquidation, which implies the taxation of the company’s hidden reserves. Both corporate income tax and withholding tax apply.