Taxes

The tax treatment of gratuitously or undervalued issued put options depends on whether they are associated with a capital reduction. If specific criteria are met, these transactions remain tax-neutral; otherwise, tax consequences may arise.

In the case of capital increases, the free or undervalued issuance of call options does not result in any tax consequences, provided certain conditions are met. Without a capital increase, the difference between the issuance and market price of the options is taxable.

Shareholder options that are provided free of charge or below market value have tax implications that depend on the legal nature and structure of the options. The recipient must pay tax on the monetary benefits arising from these perks.

Since January 1, 2018, profits of legal entities with non-profit purposes up to CHF 20,000 are exempt from federal direct taxes; cantonal taxes remain unaffected. A non-profit purpose includes activities such as political, religious, or artistic purposes, other non-commercial goals.

Capital gain from private assets is tax-free in Switzerland if it arises from normal asset management; however, if it is considered an independent professional activity, the gain is taxable. The criteria for an independent professional activity include, among others, personal risk, systematic approach, and the intention to generate profit.

Professional training and continuing education costs can be deducted for tax purposes by employees, employers, and self-employed individuals alike. Switzerland actively supports this through relevant legal provisions in the DBG.

The Federal Council is examining proposals for adjusting the asset valuation of non-listed companies to counteract hardship cases in start-ups. A flexible handling of the loss offset periods for start-ups is also suggested.

Cryptocurrencies, such as Bitcoin, are gaining relevance in everyday life and their taxation in Switzerland is similar to that of foreign currencies. However, their volatility and varying trading rates make tax assessment more difficult.

Foreigners in Switzerland benefit from the withholding tax procedure, which however means additional effort for employers as they must pay the tax monthly. Employers are also obligated to correctly fill out salary certificates and confirm the tax deduction.