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CTRIII-
Theday
afterthevote
13 February 2017
1© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated ...
2
Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the K...
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the K...
First
reactions
5
Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the K...
What’snext?
Scenario1:
Possiblenewlaw
package
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the K...
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the K...
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
Scenario2:
Possibleendof
CTRIII
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
Recommendations
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Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
19
Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
Q&A
21
Document Classification: KPMG Confidential
© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the ...
Thankyou!
kpmg.ch/socialmedia kpmg.com/app
The information contained herein is of a general nature and is not intended to address th...
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CTR III - The day after the vote

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Slides of the Webcast from 13 February 2017

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CTR III - The day after the vote

  1. 1. CTRIII- Theday afterthevote 13 February 2017
  2. 2. 1© 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Today’sheadlines 1 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
  3. 3. 2 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Herewithyoutoday Peter Uebelhart Partner Head of Tax Charles Hermann Partner Financial Services Tax Olivier Eichenberger Senior Manager Corporate Tax Stefan Kuhn Partner Head of Corporate Tax
  4. 4. 3 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Agenda What's next? Scenario 1: Possible new law package First reactions 3 34 1 Scenario 2: Possible end of CTR III Recommendations Q&A 5 6 7 What did Switzerland reject?2
  5. 5. First reactions
  6. 6. 5 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Goal Measures International acceptance Abolishment of cantonal privileged tax regimes New measures to keep the Swiss tax system attractive Financial support by the Confederation to support general reduction of income tax rates in the cantons Treatment of hidden reserves (“Step Up”) Patent box (output incentive) R&D super deduction (input incentive) Notional Interest Deduction (NID) Relief on capital taxes Compensation measures to safeguard public tax revenue If NID is introduced at cantonal level, minimum taxation of 60% of dividends from qualified equity investments held by individuals Limitation of overall deductions (measures) at cantonal level WhatdidSwitzerlandreject? Overview of measures
  7. 7. What’snext?
  8. 8. Scenario1: Possiblenewlaw package
  9. 9. 8 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Possibleareasofadjustments − Expected delay of 1-3 years − How long will the EU/OECD be patient? Scenario 1: Possible new law package No notional interest deduction (NID) Potential specific exclusion of software from patent box Higher partial taxation quota of dividend income from qualified equity investments held by private shareholders
  10. 10. 9 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. 2018 2020-2025 1 January 2022-25: Regulation enters into force and is applied in federal and cantonal law 17 June 2016: Final decision Parliament 20172016 12 February 2017: Public vote rejects CTR III 28 June 2016: Start of 100 day referendum period (official publication of new law) 6 October 2016: End of 100-day referendum period – Respective signatures filed on 6 October 2016 Timeline Timeline (future dates according to current expectation) Drafting of and decision on a new reform package 2019 Possibility of a new referendum Growing pressure from EU and OECD Scenario 1: Possible new law package
  11. 11. 10 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Impactoncorporates How would various company types be affected compared to rejected CTR III? Company type Δ Expected impact SMEs Should still benefit from lower tax rates and potentially patent box (possibly excl. software) / R&D super deduction (qualified individual shareholders may face higher income taxation) Holding companies (no additional revenues) No impact expected Group financing NID no longer available Industry sector (domestic production) Should still benefit from lower tax rates and potentially patent box / R&D super deduction International trader May still not benefit from any measures after loss of tax privilege (lower ordinary tax rates and step up to be considered) Trademark administration May still not benefit from any measures after loss of tax privilege (lower ordinary tax rates and step up to be considered) R&D / Patent companies Should still benefit from patent box (possibly excl. software) / R&D super deduction (if maintained) No general rule, individual case would need to be considered! Scenario 1: Possible new law package
  12. 12. 11 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. CTRIIIandthefinancialindustry The proposed CTR III was more relevant for Swiss industrial / commercial businesses than the financial services industry. The rejection of CTR III will impact FIs differently depending on whether they are Swiss- owned or foreign-owned. FI / Holding FI Shareholder Foreign CH FI / Holding FI Shareholder Foreign CH Swiss-owned FIs often include a Swiss holding structure Foreign-owned FIs do not usually have a Swiss holding structure Scenario 1: Possible new law package
  13. 13. 12 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Still “winners” thanks to the reduction of corporate tax rates CTRIIIandthefinancialindustry No material impact for most Swiss- owned FIs; timing of implementation and extent of corporate tax rate reductions Swiss FIs and FinTech planning large and new investments in IT may not benefit from the potential R&D super deduction and/or patent box regime Swiss-owned FIs Foreign-owned FIs How would FIs be affected compared to rejected CTR III? Scenario 1: Possible new law package
  14. 14. Scenario2: Possibleendof CTRIII
  15. 15. 14 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. NonewagreementinParliament What does this mean? Scenario 2: Possible end of CTR III Application of the current tax regimes extended by some 1-2 years Reduction of income tax rates by the cantons Financial issues of cantons Risk of “blacklisting”, especially by European countries Potential subsidies by the Confederation (e.g. through national fiscal equalization)? Due to blacklisting, companies may voluntarily waive tax privileges (applications for migrational step up under current law)
  16. 16. 15 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Impactoncorporates How would various company types be affected compared to rejected CTR III? Company type Δ Expected impact SMEs Should still benefit from lower tax rates Holding companies (with no additional revenues) No impact expected Group financing May not benefit from NID, risk of blacklisting Industry sector (domestic production) Should still benefit from lower tax rates International trader May anyhow not benefit from any measures after loss of tax privilege (lower ordinary tax rates and risk of blacklisting to be considered) Trademark administration May anyhow not benefit from any measures after loss of tax privilege (lower ordinary tax rates and risk of blacklisting to be considered) R&D / patent companies May not benefit from patent box / R&D super deduction, risk of blacklisting No general rule, individual case would need to be considered! Scenario 2: Possible end of CTR III
  17. 17. 16 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Still “winners” thanks to the reduction of corporate tax rates ImpactonSwissandforeign-ownedFIs No material impact for most Swiss- owned FIs; timing and extent of corporate tax rate reductions, timing of the abolition of the holding tax status Swiss FIs and FinTech planning large and new investments in IT will not benefit from the potential R&D super deduction and/or patent box regime Swiss-owned FIs Foreign-owned FIs How would FIs be affected compared to rejected CTR III? Scenario 2: Possible end of CTR III
  18. 18. Recommendations
  19. 19. 18 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Recommendations Scenario planning Impact analysis Analysis of any R&D instruments and other benefits − Analyze consequences of further application of tax privileges − Could potential countermeasures by foreign countries (“blacklisting”) affect my company? − May a voluntary resigning of the tax privilege reduce tax risks and overall reduce tax burdens? How can I apply a step up? − Should I get rid of my holding company? − May I benefit from any R&D instruments? − Analyze changes in the (relevant) cantons: Is my canton going to introduce further measures? How can I benefit from a general income tax rate reduction? − Location considerations − Keep a clear head − The story goes on − Analyze what the NO means for you based on the two scenarios discussed
  20. 20. 19 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. KPMG’sregionalcontacts Region Central Switzerland Markus Vogel Landis + Gyr-Strasse 1 CH-6301 Zug T: +41 58 249 49 64 Region Zurich and Ticino Stefan Kuhn Badenerstrasse 172 CH-8036 Zürich T: +41 58 249 54 14 Region Eastern Switzerland Peter Michael Bogenstrasse 7 CH-9001 St. Gallen T: +41 58 249 25 54 Region Basel Reiner Denner Viaduktstrasse 42 CH-4002 Basel T: +41 58 249 42 40 Region Bern Mittelland Hans Jürg Steiner Hofgut CH-3073 Gümligen-Bern T: +41 58 249 20 57 Region Western Switzerland Janick Pochon Avenue du Théâtre 1 CH-1002 Lausanne T: +41 58 249 46 45
  21. 21. Q&A
  22. 22. 21 Document Classification: KPMG Confidential © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. Yourcontacts Peter Uebelhart Partner Head of Tax +41 58 249 42 24 puebelhart@kpmg.com Charles Hermann Partner Financial Services Tax +41 58 249 29 82 chermann@kpmg.com Olivier Eichenberger Senior Manager Corporate Tax +41 58 249 41 67 oeichenberger@kpmg.com Stefan Kuhn Partner Head of Corporate Tax +41 58 249 54 14 stefankuhn@kpmg.com
  23. 23. Thankyou!
  24. 24. kpmg.ch/socialmedia kpmg.com/app The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received, or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The scope of any potential collaboration with audit clients is defined by regulatory requirements governing auditor independence. © 2017 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.

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