Tax planning

Investors in businesses should consider where and how they allocate the target business, in relation to which consideration must be given to the future tax implications of onward sale:

  • natural persons
    • private assets
      • profits from the onward sale of shares will amount to a tax-free capital gain; the sale of a real estate company may incur liability to real estate gains tax.
    • business assets
      • capital gains from the onward sale of shares is subject to income tax and Swiss social security obligations (AHV/IV/EO)
  • legal persons
    • holding companies
      • tax liability for state and municipal taxes
      • minor taxes on income from capital gains
    • other companies
      • capital gains from equity interests are regarded as investment income
      • may be possible to apply investment reduction

Taxes relating to share deals

The tax situation for share deals needs to be presented in a different manner depending upon the type of tax and the subject liable to tax:

  • taxes for the contractual parties
    • tax consequences for the vendor
    • tax consequences for the investor
  • taxes for the company sold

The tax consequences will be considered in this order below.

Taxes on income and profits

[spoiler effect=”slide” show=”Tax consequences for the vendor” hide=”Tax consequences for the vendor”]

The tax consequences will differ depending upon two variables:

  • subject liable to tax
    • natural persons
    • legal persons
  • previous ownership of equity interest sold
    • equity interest under private ownership
    • equity interest under business ownership

Natural persons / equity interest under private ownership

Capital gains resulting from a share deal are in principle tax-free.


  • Services to related parties
    • Services by the company to shareholder not associated with any genuine counter-performance by the shareholder
      • Example: buy-back of treasury shares by the company with no intention to re-sell
  • Indirect partial liquidation
    • The proceeds are paid indirectly to the shareholder.
      • Example: the buyer of shares refinances the purchase price for the share deal out of the assets of the company taken over, namely by:
        • dividend paid out of retained profits
        • loans from the company to the shareholder which are not intended to be repaid
        • the provision of collateral by the company

Natural persons / equity interest under business ownership

Capital gains from the sale of equity interests which are held by a sole trader business or which the holder has declared to constitute business assets are subject to income tax.

Securities dealers?

The question often arises in relation to this asset constellation as to whether a situation involves “another form of self-employment” as a securities dealer pursuant to Article 18(1) of the Swiss Federal Law on the Direct Federal Tax.

Legal persons / equity interest under business ownership

A legal person pursuant to Article 49 of the Swiss Federal Law on the Direct Federal Tax or Article 20 of the Federal Law on the Harmonisation of Direct Canton and Municipal Taxes will incur liability to pay capital gains tax for the difference between the net proceeds of the sale and the book value for tax purposes of the equity interest sold.


  • investment reduction
  • tax deferral for replacement of assets
    • provided for under the new Swiss Law on Mergers (SR 221.301), in particular for transfers of assets under that Law (Article 69 ff.).
    • example: group companies.


[spoiler effect=”slide” show=”Tax consequences for the investor” hide=”Tax consequences for the investor”]

Share deals do not have any direct tax consequences for the investor.

However, the following questions may arise in relation to them:

  • if the investor is a natural person
    • are assets classified as private or business?
    • can goodwill be amortised?
      • equity interest under private ownership: no amortisation of goodwill
      • equity interest under business ownership: goodwill may be amortised subject to demonstration of actual reduction in value
    • taxation of financing costs?
  • if the investor is a legal person
    • consolidation excluded
      • investor cannot offset financing costs against profits from the company taken over
    • allocation under holding or flagship company?
    • holding company
      • income tax exempt holding company unattractive for tax-deductible costs
    • flagship company
      • financing costs may offset against tax.
    • is goodwill eligible for amortisation?
      • goodwill may be amortised subject to demonstration of actual reduction in value.


[spoiler effect=”slide” show=”Taxes for the company sold” hide=”Taxes for the company sold”]

The company sold is an independent taxpayer and continues to be autonomous, both during and after the M&A deal.


Withholding tax

There are no relevant consequences for the purposes of the withholding tax for vendors and investors in share deals.

Tax avoidance

The Swiss Federal Tax Authorities take a critical view of the following situations, in which they may make a finding of tax avoidance:

  • foreign national sells company to Swiss national
  • refinancing of the purchase price out of the assets of the company taken over.

The company taken over, not the vendor, is liable to pay the withholding tax.

Securities transfer stamp duty

Securities transfer stamp duty is only payable where all of the following three prerequisites have been met:

  • transfer of assets for consideration
  • taxable certificates
  • one of the contractual parties or one of the brokers is a securities dealer

Amount of the stamp duty:

  • for certificates issued by Swiss nationals: 1,5 %
  • for certificates issued by foreign nationals: 3,0 %

Liability to pay:

  • securities dealer

Payment deadline:

  • within 30 days of the end of the quarter during which the tax liability arose.

Value added tax

Turnover realised on equity interests, securities and book-entry securities is exempt from VAT. For share deals neither the vendor nor the investor is liable to pay VAT.

Print / Share: