After a hearing initiated by the Swiss Federal Department of Finance (FDF) in spring 2014 ( cf. our Bär & Karrer Briefing of July 2014), the FDF has presented the modified Expatriate Ordinance on January 16, 2015. The modifications to the Expatriate Ordinance shall enter into force as of January 1, 2016. Whereas the possibility for expatriates to claim tax allowances for special professional expenses shall be maintained, certain restrictions will be implemented. The ordinance's scope shall, in particular, be limited to assignments in the technical, narrow sense of the Swiss tax law in order to increase the general acceptance of tax allowances for expatriates amongst the Swiss population.

1. Introduction

Under the current Swiss tax law, "expatriates" are defined as key employees and specialists with special professional qualifications. They are entitled to claim additional tax deductions (special professional costs) based on the Expatriate Ordinance ("ExpaV", SR 642.118.3).

Following two parliamentary motions, the FDF proposed modifications to the ExpaV which were subject of hearing procedures amongst interested parties until July 2014. After the FDF's report on the hearings' key results, on January 16, 2015, the FDF presented the modifications to the ExpaV to enter into force as of January 1, 2016. The following chart summarizes the main changes compared to the current law.

2. Comparison: Current Tax Allowances Versus Tax Allowances as of January 1, 2016

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