Capital contribution principle

Tax-free repayment of capital contributions

The introduction of the capital contribution principle as per 1 January 2011 meets a longstanding demand by business and improves Switzerland’s attractiveness as a location in a competitive tax environment. Contributions, agios and additional payments made to companies by shareholders after 31 December 1996 can be repaid free of withholding or income tax.

The new provision is especially interesting for businesses whose shareholders are private persons, for publicly quoted firms, and for Swiss subsidiaries of overseas groups.

Your challenges

  • Identifying and documenting capital contributions between 1.1.1997 and 31.12.2010
  • Determining the current value of the capital contribution
  • Notifying the Swiss Federal Tax Authority of the capital contribution
  • Ensuring correct representation in the balance sheet

How PwC can support you

PwC can help you with implementation issues arising from the legal provisions for the capital contribution principle. Our specialists will analyse your current tax situation and present potential solutions so you benefit optimally from the possibilities offered by the capital contribution principle.