Federal Act on Tax Reform and AHV Financing

Tax benefits for income from intellectual property rights are used to promote research and development and the resulting value creation in these areas. The wording of the law provides a precise definition of which patents or similar rights qualify for box taxation. In addition to this, the regulations contain detailed specifications on the calculation mechanism used as well as the documentation requirements. The nexus approach is consistent with the international OECD standard, and can be applied by patent, product or product families. The patent box deduction has been implemented in all cantons, but in some cases only to a limited extent.

Further information: www.patent-box.org

The introduction of an additional special deduction for research and development expenses is optional for the cantons, but in most cases has been introduced. This deduction may not exceed 50% of the relevant R&D expenses in Switzerland. It is left to the taxpayers to analyse to what extent they can benefit from the patent box, the special deduction or a combination of both. 

• the introduction of a self-financing deduction at the state and municipal tax level in the Canton of Zurich,
• limiting the maximum relief of all new measures at the cantonal level to 70%,
• more uniform tax treatment for cantonal and federal taxes in the event of a change of tax status or of companies moving into or out of Switzerland,
• the reduction of corporate tax rates in various cantons (financed by increasing the cantons’ share of direct federal taxes),
• adjustments to cantonal capital tax rates, 
• the introduction of a proportionality rule in the capital contribution principle for companies listed on a Swiss stock exchange, 
• increasing the partial taxation of private dividend income to 70% for federal taxes and at least 50% for cantonal and municipal taxes, and
•  increasing the AHV contribution rates of employers and employees by 0.15% each as a social compensation measure, leading to additional financing of CHF 2 billion per year for the AHV.