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Switzerland To Abolish Issuance Stamp Duty

by Ulrika Lomas,, Brussels

07 December 2011

Following careful examination of its fiscal priorities, Switzerland’s Federal Council has decided to abolish the stamp duty on the issuance of corporate capital and improve the tax system for married couples.

The Federal Council’s decision was taken following careful examination of the federal tax authority’s July 1 report into the progressive abolition of stamp duty in Switzerland, as part of plans to improve the fiscal framework for the Swiss financial centre. The Council has, however, decided to maintain for fiscal reasons other stamp duties, including for example the insurance premium tax.

The study examines how and when stamp duty could be abolished, as well as evaluating measures to counter-finance the proposals and considering the efficiency of the levies and their effects on the attractiveness of the Swiss financial centre.

Additionally, the federal government announced that it is committed to ending discrimination against married couples in the tax system. At the end of October, the Swiss federal administration announced that the Federal Council had requested the drawing up a bill by summer 2012, for consultation, to eradicate current imbalances in the country’s system of direct federal taxation as regards married couples.

The federal administration underscored at the time that the aim of the bill is on the one had to ensure that the fiscal burden on married couples and married pensioners with a dual income does not exceed the burden imposed on cohabiting couples in a similar economic situation, and on the other to ensure that the burden on married couples with a single income is not greater than married couples with a dual income, in relation to their ability to contribute.

In its statement, the federal administration explained that at the moment the direct federal tax burden on some married couples and married pensioners on two incomes is still greater than on their cohabiting counterparts. It notes that if the additional burden exceeds 10% it then violates the constitutional principle of equal rights.

Plans to correct the imbalance and to end such fiscal discrimination are expected to result in a shortfall in revenues of between CHF900m (USD977m) and CHF1.3bn.

TAGS: tax | business | capital markets | insurance | international financial centres (IFC) | tax authority | offshore | stamp duty | Switzerland

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