TRAF ordinances consultation

TRAF ordinances consultation

The following ordinances are relevant:

1) The new ordinance on the tax deduction for self-financing of legal entities;

2) The ordinance on the tax credit related to foreign taxes levied at source;

3) Ordinance 1 of the Federal Department of Finance (FDF) on the tax credit related to foreign taxes levied at source.

The ordinance on the tax deduction for the self-financing of legal entities determines the computation of the capital benefiting from the deduction of interest and the applicable tax rate.

The ordinances on tax credit related to foreign taxes levied at source determine how to avoid double taxation for individuals or legal entities established in Switzerland who generate income subject to taxation at source abroad. The Federal Council also proposes to abandon the lump-sum distribution of the amount of the tax credit between the Confederation and the cantons and to make an effective distribution on a case-by-case basis.

Two other ordinances are also part of the enforcement ordinance package related to the federal TRAF law, i.e. the ordinance on the patent box and the one on the fiscal equalization and the charge compensation. The latter have however already been opened for consultation in 2017 and the Parliament has in the meantime not (or in a very limited manner) amended the corresponding legal provisions of the TRAF law.

If the TRAF is accepted in the popular vote of May 19, 2019, these ordinances will enter into force on January 1, 2020, at the same time as the federal law.