Administrative relief in tax matters: what the Federal Council is planning

Background to the proposals

The reforms are based on the Federal Council’s assessment that international developments – such as deregulation initiatives by key trading partners, trade policy uncertainties and increasing competitive pressure – are affecting Switzerland’s attractiveness as a business location. Against this backdrop, existing regulations are to be reviewed and administrative processes simplified. Particular emphasis is being placed on plans to simplify processes relating to value added tax (VAT), withholding tax and stamp duty.

 

Annual VAT returns for all businesses

One of the key changes concerns value added tax. Since 1 January 2025, businesses with annual turnover not exceeding CHF 5,005,000 can apply to submit VAT returns annually instead of quarterly. This turnover threshold is now to be abolished, allowing all VAT-registered businesses, regardless of size, to opt for the annual reporting method.

The Federal Council believes that this amendment will reduce the administrative burden noticeably, as it will no longer be necessary to monitor compliance with the turnover threshold. The obligation to make advance payments will remain in place, meaning that no significant impact on federal tax revenues is expected. Around 25,000 additional businesses could benefit from this simplification.

 

Simplification of issuance stamp duty in corporate restructurings

A significant amendment is also proposed in relation to issuance stamp duty. Under current law, a tax-free allowance of CHF 10 million applies in cases of corporate restructuring. Amounts exceeding this threshold may be waived upon application where an obvious case of hardship exists. The existing procedure generates additional administrative work and advisory costs, however.

In future, the waiver procedure is to be abolished. Instead, the existing restructuring exemption will be expanded by removing the current CHF 10 million cap. Both formal and informal restructurings will be exempt from issuance stamp duty ex officio, irrespective of their value, provided that existing losses are eliminated. Businesses would therefore no longer be required to submit an application for a tax waiver. The resulting loss of tax revenue is expected to amount to less than CHF 10 million per year, while the administrative burden will be significantly reduced.

 

Limiting filing obligations with the FTA

A further measure concerns the obligation to submit annual financial statements to the Swiss Federal Tax Administration (FTA). Currently, many companies are required to do so without being specifically requested, particularly if they meet certain size criteria.

In the area of withholding tax, only companies that actually make taxable distributions – such as dividends or deemed dividend distributions – will in future be required to submit such documentation. The FTA will retain the right to request supporting documents in individual cases. At the same time, it is proposed that submissions be made exclusively in electronic form.

For issuance stamp duty, too, the existing balance sheet total threshold is to be abolished. In future, annual financial statements would only have to be submitted at the request of the FTA. According to the Federal Council, around 45,000 businesses could benefit from these simplifications overall.

 

Extension of the notification procedure for withholding tax

Of particular practical significance is the proposed extension of the notification procedure within corporate groups. Under the current legislation, its application is generally limited to direct parent–subsidiary relationships. In other intra-group scenarios, withholding tax must first be paid and subsequently reclaimed through the refund procedure.

Under the proposal, the notification procedure would also be permitted for additional intra-group transactions where the companies involved are fully or proportionately consolidated in accordance with recognised accounting standards. This would allow deemed dividend distributions within more complex group structures to be reported directly without the need to pay withholding tax in advance. The Federal Council expects this to simplify administration and improve liquidity for the businesses concerned.

 

Additional measures at the administrative practice level

Alongside the proposed legislative amendments, the FTA is implementing various practical simplification measures. These include expanding digital services, promoting electronic interfaces, and further developing eBalance and eInvoicing solutions. In addition, the requirement to submit Form 9 / 9 FL for nil securities transfer tax returns is to be abolished. These measures are intended to further reduce the administrative burden associated with tax administration.

 

Targeted simplifications with practical benefits

Although the proposed amendments do not constitute a comprehensive tax reform, the targeted measures would be of considerable practical relevance. They reduce recurring administrative tasks, streamline reporting obligations and eliminate unnecessary liquidity pressure. Particularly in an increasingly demanding regulatory environment, such simplifications can make a tangible contribution to easing the burden on businesses.

It remains to be seen whether, and in what form, the proposals will ultimately be implemented once the consultation process is concluded.