Share with your friends

Switzerland: Financial consequences of pandemic for tax purposes (COVID-19)

Switzerland: Financial consequences of pandemic

Companies need to consider whether the financial consequences of the coronavirus (COVID-19) pandemic must, can and/or may already be taken into account (for tax purposes) in the 2019 financial statements.


Related content

In accordance with the periodicity principle, expenses and income are to be allocated to the period (financial year, tax year) in which they were incurred. The formation of provisions can also take account of future outflows of funds, lower inflows or reductions in value. Whether a provision is to be set up is determined at the time of the balance sheet date, for example 31 December.

If the triggering event (i.e., the cause of a future cash outflow, lower inflows or reductions in value) already exists at the balance sheet date, a provision is to be charged to the financial statements. For this purpose, information may also be used which only became known after the balance sheet date. However, if the triggering event has occurred after the balance sheet date, its expected effects must be disclosed in the notes to the financial statements.

Provisions charged to the annual financial statements are, if they comply with commercial law, also relevant for tax purposes (so-called authoritative principle of the commercial balance sheet). Corrections by the tax authorities are only made to the extent that the commercial balance sheet obviously violates mandatory commercial law or tax law has a corrective norm, which applies in particular to expenses, depreciation and provisions that are not justified under commercial law.

Within the framework of cantonal support measures, the cantons of Zug and Valais, for example, have decided to make concessions by recognizing additional provisions (COVID-19 provisions) for tax purposes.

In concrete terms, Zug and Valais companies that suffer directly or indirectly from the negative effects of the virus may set aside extraordinary provisions in the 2019 financial year. These provisions must be released again in the 2020 financial year.

The Canton of Aargau also allows additional "COVID-19 provisions" in the 2019 financial year.

Read an April 2020 report prepared by the KPMG member firm in Switzerland

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in 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. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal