Abolition of the 1% Issuance Stamp Duty

Abstract

Today, the Swiss Federal Parliament approved the abolition of the 1% issuance stamp duty. The Social Democratic Party is expected to launch a referendum.

Switzerland levies an issuance stamp duty of 1% on the creation and increase of equity of Swiss corporations in excess of one million francs. This tax on the capitalization of companies is known as “capital tax” and has in most European countries long disappeared. It is perceived as one of Switzerland’s disadvantages in international tax competition since it impedes the raising of equity and places a financial burden on companies. Start-ups, which are mainly financed by capital increases in the founding years, are particularly affected.

Today, the Assembly of the Federal Parliament resolved to abolish the issuance stamp duty. This resolution goes back to a parliamentary initiative of the Liberal Democratic Party in 2009. Already in 2013, the National Council has approved the abolition of the issuance stamp duty. However, the preliminary bill was subsequently suspended by the Council of States. After a group of experts with representatives from the Federal government, cantons, business and science recommended the abolition of the issuance stamp duty in December 2020 and the Federal Council also expressed a positive opinion, the Council of States has now also approved the proposal.

The abolition of the issuance stamp duty would result in annual revenue losses of around CHF 250 million for the Federal government in the short term. However, it is expected that these would be more than offset in the medium to long term by the positive effect on the economy.

The abolition of the issuance stamp duty could in principle come into force on January 1, 2022. However, the Social Democratic Party has announced that it will launch a referendum. It is expected that the required 50,000 signatures will be collected and that a popular vote will take place. Accordingly, the Swiss people should ultimately decide. Such a popular vote is not likely to take place until 2022, so that the entry into force of the abolition of the issuance stamp duty is likely to be delayed.

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