Elimination of losses no longer needed for issuance stamp duty waiver
On November 29, 2021, the Federal Administrative Court ruled that, contrary to the long-standing practice of the SFTA, the elimination of losses in the balance sheet is not required for the restructuring exemption or waiver of the issuance stamp duty.
According to the previous practice of the SFTA, the exemption from the issuance stamp duty for restructurings up to CHF 10 million according to Art. 6 para. 1 lit. k StG or the waiver of the issuance stamp duty according to Art. 12 StG was only granted if the capital contribution reserves created by the restructuring measures were compensated with losses in the balance sheet. The companies concerned therefore had to choose between saving the issuance stamp duty at the expense of capital contribution reserves that can be distributed free of withholding tax and the creation of such capital contribution reserves at the expense of the issuance stamp duty.
With its ruling A-5073/2020 of November 29, 2021, the Federal Administrative Court overrules this practice. There is no basis in the law to require the elimination of losses in the balance sheet for the granting of the restructuring exemption or waiver. Accordingly, such a loss elimination cannot be required. In the future, companies will therefore no longer have to choose between the issuance stamp duty and capital contribution reserves in the event of a restructuring. On the contrary, in restructuring cases, no issuance stamp duty is due even if the newly created reserves are not compensated with losses, but are accounted for in the balance sheet as capital contribution reserves and reported to the SFTA on Form 170.
The appeal in public law matters to the Federal Supreme Court is excluded against decisions on the waiver of taxes. Accordingly, this ruling can only be appealed insofar as it relates to the restructuring exemption of up to CHF 10 million according to Art. 6 para. 1 lit. k StG. The statements of the Federal Administrative Court regarding the issuance stamp duty waiver according to Art. 12 StG are therefore legally binding and the SFTA must adjust its practice accordingly.
This Homburger Bulletin expresses general views of the authors at the date of the Bulletin, without considering the facts and circumstances of any particular person or transaction. It does not constitute legal advice. This Bulletin may not be relied upon by any person for any purpose, and any liability for the accuracy, correctness or fairness of the contents of this Homburger Bulletin is explicitly excluded.