In economic life, debt waivers involving associated companies take on central significance in the context of a restructuring. It can be assumed that restructuring will greatly increase in the near future due to the financial difficulties of many companies resulting from the current COVID-19 crisis. Although the tax treatment of a debt waiver granted by an independent third party is essentially well defined (ie, it is recognised in income), many questions will arise if debt is waived by a related party – namely, a shareholder.
Due to the COVID-19 pandemic, a number of tax return deadlines have been extended for legal entities; however, numerous questions concerning corporate tax requirements for the 2019 and 2020 fiscal years and contentious legal proceedings in tax matters remain. This article examines some of the most salient questions in this regard.
Foreign companies can now take advantage of a tax-neutral step-up of built-in gains (including self-created goodwill) to fair market value for Swiss direct tax purposes when relocating their legal seat, effective place of management or assets, business units and functions to Switzerland from overseas. The disclosed built-in gains may be depreciated tax-effectively over a specified time period, allowing the Swiss company or branch to reduce its tax burden significantly during the respective timeframe.
The Organisation for Economic Cooperation and Development recently released a statement update on a new international framework to allocate part of the profits of multinational enterprises with a substantial digital business footprint in countries in which they have a large user base, but no physical presence. Switzerland has stated that it will maintain its support for the development of a multilateral solution for taxing the digital economy to avoid unilateral actions that jeopardise growth and innovation.
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.
The European Parliament recently decided to postpone the transition timeline to implement the EU Medical Device Regulation, which was set to expire on 26 May 2020, until 26 May 2021. Although there has been no official statement from the European Union, the competent Swiss authorities consider it as granted that the status quo regarding medical devices continues to apply to Switzerland. This article discusses the presumed impact of the postponement on the Swiss medtech industry.
The Federal Department of Home Affairs recently decided that two new autologous cell therapies (CAR-T therapies) for the treatment of blood and lymph gland cancer will in future be covered by compulsory healthcare insurance. Further, preventive investigations of colorectal cancer will be exempted from the franchise in the Cantons of Fribourg and Basel-Stadt. In addition to these changes, a number of other adaptations have been made to the Healthcare Benefits Ordinance and its annexes.
The Lausanne University Centre for General Medicine and Public Health, in close cooperation with the Swiss Biobanking Platform, recently commenced the pilot phase of the so-called 'Swiss health study', which aims to determine which chemicals accumulate in the human body. The pilot phase is supported by the Federal Office of Public Health.
The popular nursing care initiative 'For Strong Nursing Care' is calling for more nursing staff and quality safeguarding in nursing care. The Swiss parliamentary Commission for Social Security and Health recently presented an indirect counterproposal to this popular initiative. The counterproposal adopts a number of the initiative's important demands and aims to counter the nursing staff shortage and increase nursing staff skills with an educational campaign.
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 Council recently adopted the Ordinance on Protecting against Cyber Risks (OPCy), which is set to enter into force on 1 July 2020. This move is the next step in a series of measures taken by the Federal Council to adopt a new organisational structure and implement a national strategy to protect Switzerland against cyber risks. Along with the adoption of the OPCy, the Federal Council has also planned for 20 additional positions in the respective offices for cyber risk protection.
The Reporting and Analysis Centre for Information Assurance recently published its latest semi-annual report regarding the most important cyber incidents and cyber risks of the second half of 2019 in Switzerland and abroad. The report contains several practical recommendations for individuals and companies to improve their protection against cyberattacks.
Data protection laws continue to apply as they did prior to the COVID-19 crisis. However, the Swiss data protection authority, the Federal Data Protection and Information Commissioner, will be aware of the particular challenges and constraints that employers face at present. This article provides an overview of some of the data protection issues that employers face.
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.