Liquidity buffer in the area of tax
- Liquidity reserve in the tax area on federal level: companies are able to postpone payment deadlines without interest on arrears. The interest rate is reduced to 0.0% for VAT, certain customs duties, special consumption taxes and incentive taxes between 20 March and 31 December 2020; i.e. no default interest will be charged during this period. An identical regulation applies for direct federal tax invoices from March 1 to December 31, 2020 that become due within this period. Withholding tax and stamp duty do not appear to benefit from these advantages.
- Some cantons have also already communicated measures relating to cantonal and municipal taxes. In particular, most of the cantonal tax authorities have implemented certain measures in connection with the cantonal/communal taxes (e.g. extension of payment deadlines, waiving of late interests, postponement of filing deadline of the 2019 tax return, etc.).
- The due dates for these taxes and duties do remain formally in place. Therefore, companies wishing to settle tax liabilities after their due date must submit a corresponding application – in practice, this can be fairly informal in nature – to the tax authorities. The form of notification can vary depending on the type of tax in question.
The approach of the Swiss tax authority concerning relief related to value added tax (VAT) reflects the following
- To benefit from tax payment deferrals, companies must file a written request in accordance with provisions of the VAT law, and this applies to all taxpayers including foreign companies with a Swiss tax representative. All applications must be submitted by email or post. No separate procedure is currently planned.
- The Swiss tax authority is currently prioritizing the review of requests for early payments of VAT credits and is aiming for fast payment settlement.
- Businesses may extend payment periods for value added tax (VAT), customs duties, special excise taxes, and incentive taxes, without having to pay interest. For this reason, the interest rate on late payments will be reduced to 0.0% in the period from 21 March 2020 to 31 December 2020. No interest on arrears will be charged during this period.
- There are currently no separate extensions to the deadlines for VAT refund procedures planned (i.e., the deadline concerning VAT incurred in the calendar year 2019 was 30 June 2020).
- The late-payment interest rate of 0.0% applies to all VAT payment obligations regardless of when the obligation arose, for the period from 20 March to 31 December 2020.
Income taxes (federal tax / cantonal & communal taxes)
- Final tax bills: companies that are currently unable to pay final tax bills due to the effects of COVID-19 can apply for an extension of the payment deadline or installment payments. By special decree, late payments of the federal tax due in the period as from 1 March 2020 to 31 December 2020 will not incur any default interest.
- Provisional tax bills / payments on account: for Swiss federal tax purposes, companies currently unable to pay the provisional tax bills due to COVID-19 can apply for an extension of the payment deadline or installment payments.
Social security contributions
- Upon request, companies affected by the crisis can be granted a temporary deferral of payments for social security contributions (AHV / IV / EO / ALV). The companies also have the option of having the amount of regular payments on account adjusted if the total of their wages has decreased significantly.
- As per 20 September 2020, default interest was reintroduced on deferred payments.
Individual income tax returns
- The general filing deadline for 2019 tax returns in the cantons would have been March 31, 2020. However, with the COVID-19 relief measures, the filing deadlines for individual income tax returns have been extended to a variety of dates—the new filing dates range from May 31, 2020, or June 30, 2020, or July 31, 2020, or even September 15, 2020 (depending on the canton). Individual deadline extensions are possible (depending on the canton).
- The Swiss Federal Council also has provided relief measures regarding the deadline for payment of federal income tax. For federal income tax payments generally due between March 1, 2020 and December 31, 2020, no late-payment interest will be levied because the tax payment is delayed.
Various Swiss cantons have also announced tax relief measures. Due to the current situation, many cantons have automatically extended the regular deadline for submission of the 2019 tax return for individuals and in some cases also for judicial persons. In addition, some cantons provide for an extension to the application deadline for tariff adjustments for source tax. It is possible to apply for an amendment to the provision tax invoice for cantonal and municipal taxes for 2020 if a drop in personal or corporate income, or even a loss, is expected in the current year. If, due to the impact of COVID-19, companies are unable to pay tax liabilities that have been finally assessed and are due for payment, they may apply for an extension to the payment deadline or request to pay in installments. Some cantons have already indicated that they will deal with such requests quickly and fairly. Certain cantons are also temporarily waiving late payment interest.
Some cantons, such as Aargau, Thurgau, Valais or Zug, accept an extraordinary provision in the 2019 financial statements for losses that will occur in 2020 due to COVID-19 up to a certain amount or under certain conditions.
An overview of cantonal measures is contained on KPMG in Switzerland's website.
Regarding the identification requirement under anti-money laundering regulation, relief is provided with regard to the application of due diligence obligations for new accounts until 1 July 2020 in response to the coronavirus (COVID-19) pandemic. The relief extends the period from 30 days to 90 days for confirming the authenticity of copies of identity documents. This provision can be applied to new business relationships so that they can be opened with a simple copy of an identity card (providing the authentication in the subsequent 90 days). However, for business relationships with increased risks, it must still be assessed and documented on a case-by-case basis whether applying the exception in that particular case is acceptable in view of the associated money-laundering risks. Regardless of the relationship’s risk category, the missing confirmation of authenticity must be provided within 90 days.
This facilitation may also be available for non-banks, such as external asset managers that are regulated through a self-regulatory organization (SRO) as soon as their SRO also provides for this facilitation.