Parliament wants to relieve startups of tax burdens.

After the National Council had already accepted the motion for tax privileges for startups in June 2017, the Council of States has now also agreed. A minority in the Council of States, as well as the Federal Council, had recommended rejecting the motion due to tax inequity. Now the Federal Council has two years to develop a corresponding solution.

The Commission for Economic Affairs and Taxes of the National Council (WAK-NR) submitted a motion in April 2017, which would mandate the Federal Council to develop an attractive and internationally competitive solution for the tax treatment of start-ups, including their employee shareholdings. After the National Council accepted the motion in June 2017, it came before the Council of States on September 24, 2018. According to the Economic Commission, there is a need for action since the existing rules are designed for publicly traded large corporations and not for smaller startups. If these companies were to issue employee shares, they could agree with the cantonal tax authorities on a formula value that would be considered the market value. However, this would need to be negotiated with the authorities on a case-by-case basis, which means there is no legal certainty. The commission also criticized the fact that if the earnings exceed the formula value and a sale takes place, full income tax would be due, even though the company is not yet making a profit. A minority of the Council of States rejected the motion, arguing that with the upcoming tax proposal 17, startups would also be tax-privileged. Furthermore, tax sovereignty is a matter for the cantons, which have sufficient options for tax benefits for young companies. Regarding employee shares, it was stated that these too are a form of employee participation and that the valuation must continue to be made individually for each company. But the Federal Council also rejected the motion. Ueli Maurer saw in the motion a violation of the neutrality of tax law, as startups would be treated preferentially. Unemployed workers would be treated differently, as they would receive wages instead of participation. The fact that employee participations could be tax-free as income in the future could not be reconciled with constitutional taxation. The motion would further lead to startups preferring to issue employee shares instead of wages for tax reasons. Moreover, it is difficult to delineate, up to what company stage one could speak of a startup.

The Council of States approved the motion with 27 to 14 votes. This gives the Federal Council two years to fulfill the order of the motion.

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