A proposal to reduce the tax burden on employee participation in start-ups and family businesses has advanced following approval by committees of the Council of States (“WAK Ständerat”) and the National Council (“WAK Nationalrat”).
Under the current tax framework and practice of the cantonal tax authorities, the valuation of employee stocks for tax purpose is often an issue for unlisted companies—in general, start-ups and family businesses. This makes employee stocks of unlisted companies unattractive from a tax perspective compared to employee stocks of listed companies.
The initiative would provide tax benefits in terms of: (1) the tax valuation of employee stocks for wealth tax purposes; (2) capital gains treatment on the sale of employee stocks; and (3) taxation of employee stock options. Under the proposal:
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.