The Federal Council recently announced its intentions to resume the temporarily suspended Swiss withholding tax reform and set out the general framework to introduce a paying agent tax system with regard to interest payments. However, as the Federal Council's communication did not contain any details, it remains to be seen how the reform will be set out in the draft bill expected in Autumn 2019 and how it will affect paying agents and investors.
Swiss voters recently approved a new corporate tax reform, which will set the basis for new rules on Swiss corporate taxation and secure and enhance Switzerland's overall attractiveness as a business location. The reform includes a patent box, an R&D super deduction and a notional interest deduction for high-tax cantons. There are also substantial non-tax (revenue-raising) measures and new provisions on social security contributions.
The Swiss Federal Tax Administration recently relaxed its practice under which bonds that are issued by foreign resident issuers, but guaranteed by their Swiss resident parent company, are requalified as domestic issuances which trigger Swiss withholding tax on interest payments. The revised rules significantly increase the permissible use of proceeds in Switzerland.
The Swiss Federal Tax Administration recently published the 2019 safe haven interest rates to be used on intra-group loans. Against this backdrop, this article provides an overview of the relevant Swiss tax rules associated with determining whether intra-group financing constitutes equity or debt for tax purposes and the consequences of each characterisation.
In the context of the bill on the Federal Act on Tax Reform and AHV Financing, the Swiss Federal Tax Administration recently announced that, as of 1 January 2019, it will abstain from granting rulings which safeguard the tax privileges of new principal companies and finance branches. Existing rulings for these regimes will no longer be valid after 1 January 2020 as part of the overall Swiss tax reform.
The Federal Administrative Court recently annulled a Federal Office of Public Health (FOPH) order that had limited the price increase of a medicinal product on the list of specialities to two years. The FOPH had permitted a temporary (ie, two-year) price increase of 20%; however, the Federal Administrative Court upheld the manufacturer's argument that such time limits may be imposed only for comprehensible and appropriate reasons, which the FOPH could not convincingly provide.
The Federal Supreme Court recently dismissed an appeal against a Zurich Social Insurance Court decision concerning the replacement of an appellant's breast implant under compulsory health insurance. According to the Federal Supreme Court, a gynaecologist's reasoning that the appellant's pain was most likely caused by the implant was incomprehensible and therefore the Zurich Social Insurance Court's decision was not arbitrary.
The Federal Council recently submitted to Parliament a dispatch approving the Council of Europe Convention against Trafficking in Human Organs. The Federal Council supports the convention, which aims to harmonise criminal provisions internationally. In particular, the convention provides for the prosecution of all human organ trafficking, regardless of where it takes place.
The Federal Council recently adopted new measures to combat rising costs in the public healthcare sector. With this first set of measures, the Federal Council intends to provide all stakeholders with the instruments needed to reduce costs and expects to save several hundred million Swiss francs annually.
The Federal Council recently approved a draft of the Social Security and Health Commission of the Council of States in order to improve the legal basis for the transfer of data of insured persons. The Federal Council intends to collect personal data from insured persons while guaranteeing the protection of personal data and upholding the principle of proportionality.
In recent years, the number of publicly placed and listed securitisation transactions in the car leasing and credit card sectors has increased significantly. The driving force behind this development is economic rather than legislative, as Swiss law places no specific restrictions on asset classes eligible for securitisation. However, compliance with certain Swiss legal concepts is crucial when setting up a securitisation transaction involving Swiss law-governed receivables.
A key consideration for any investor or rating agency is the insolvency analysis of a securitisation transaction. In this context, the insolvency remoteness of the special purpose vehicle is a decisive element. Another important consideration are the circumstances under which a securitisation transaction may be set aside in the context of an insolvency proceeding. This article focuses on the avoidance actions set out in the federal Debt Enforcement and Bankruptcy Act.
Switzerland has no specific securitisation legislation. Therefore, securitisation transactions are subject to the general legal framework that applies to all other financial transactions with respect to, among others, both corporate law and regulatory matters. This article provides a short overview of certain company-related aspects to consider when setting up a special purpose vehicle structure for a securitisation transaction in Switzerland.
The Swiss securitisation market is highly active and attractive for both issuers and investors. However, Switzerland has not enacted any specific securitisation legislation. Therefore, securitisation transactions are subject to the general legal framework that applies to any other type of financial transaction. This article provides a short overview of several regulatory aspects to consider when setting up a securitisation transaction in Switzerland.
The Swiss securitisation market has developed steadily and successfully in recent years, attracting various issuers for both private and public transactions. Many of these issuers have become constant issuers on the Swiss market, which remains active and driven by the still low (or negative) interest environment. Specifically, recent notable activity has concerned auto-lease assets and credit cards, mortgage assets and the asset-backed security market environment.
On 1 January 2020 the Swiss Financial Market Supervisory Authority implemented various revised rules primarily targeting small banks (the so-called 'small banks regime'). Among other aspects, this will result in a relaxation of IT outsourcing requirements for financial institutions. The amendments are positive and a step in the right direction, as they will allow financial institutions to enjoy more leeway to benefit from IT outsourcing services.
While many countries have introduced far-reaching obligations to report cyber incidents, Switzerland has not yet followed this lead. However, the Federal Council recently adopted a report which considers key issues with regard to the introduction of a general reporting obligation for operators of critical infrastructure. The report also discusses possible implementation models.
The Federal Council recently adopted a dispatch message to improve the legal framework governing distributed ledger technologies (DLT) in Switzerland. The Federal Council's objective is to increase legal certainty, remove obstacles to DLT-based applications and limit the risk of abuse. The Swiss parliament will examine the dispatch message in early 2020.
In view of the media industry's ostensibly democratic and political role, the Federal Council has decided to adopt effective and feasible support measures. These measures will be implemented by adapting existing laws and incorporating online media into the scope of the Federal Act on Radio and Television. However, the plan to create a new Electronic Media Act has been abandoned.
The Supreme Court of the Canton of Zurich recently clarified that employers must clearly regulate the private use of work communication devices, as well as any related control mechanisms. Further, data processing such as verifying WhatsApp chat messages – even if the information is stored on a work mobile phone – must be done in accordance with the more restrictive Article 328b of the Code of Obligations.