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Swiss Federal Council Rules On Tax Status Of Fines And Bribes

by Ulrika Lomas, Tax-News.com, Brussels

21 December 2015


The Swiss Federal Council has launched a consultation on a legislative change to ensure that companies cannot deduct fines and other punitive financial sanctions from tax.

A motion on the "Tax deductibility of fines" (14.3450) would establish a clear statutory basis for the tax treatment of punitive financial sanctions, the Swiss Federal Council said.

With the exception of tax fines, the tax treatment of fines, financial penalties, and financial administrative sanctions has not been explicitly regulated for companies up to now.

In the future, punitive financial sanctions and associated procedural costs are to be expressly non-deductible for tax purposes. The same should also apply for other expenses associated with offenses. In contrast, non-punitive profit disgorgement sanctions are to remain deductible.

In addition, under the legislation, bribery payments to private individuals will no longer be allowed as expenses that are justified for business purposes.

TAGS: individuals | compliance | tax | business | legislation | Switzerland | tax reform | penalties

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