Tax Act (StG) - Subject Matter of the Act (STG)

1. The canton and the tax-entitled municipalities levy the following taxes under this law

a. * Income, wealth, and expenditure taxes from natural persons;

b. Profit and capital taxes from legal entities;

c. Withholding taxes from certain natural and legal persons;

d. Real estate capital gains and property transfer taxes from certain natural and legal persons;

e. * ...

2. The provisions of federal law and international treaties remain applicable in inter-cantonal and international relations.

3. Special laws in tax matters remain reserved.

4. Where this law uses the masculine form for natural persons, it also applies to female persons.

1. The income, wealth, expenditure, and property gain tax calculated according to the tax rates of this law is the basic tax.

2. The ordinary tax is calculated by multiplying the basic tax by the determined tax rate.

3. The cantonal tax rate amounts to 3.15 units. The municipal tax rate is determined by resolution of the municipal assembly.

4. To finance a significant municipal infrastructure facility, the municipal tax rate can be temporarily increased and designated for this purpose. The determination of the additional units is made in conjunction with the corresponding credit decision at a municipal ballot.

4a. The municipal assembly may, in case of good financial standing, grant a discount on the municipal tax rate with the adoption of the municipal budget for the relevant budget year.

5. The cantonal council may, in case of good financial standing, grant a discount of no more than 0.3 units of the state tax rate with the adoption of the state budget for the relevant budget year.

1. Taxpayers and tax authorities shall act in good faith when exercising their rights and fulfilling their obligations.

2. If legal arrangements obviously do not correspond to economic realities, the economic circumstances shall apply for the implementation of the law.

3. Legal arrangements intended to circumvent taxes shall not be recognized.

4. The governing council may

a. conclude reciprocal agreements with other cantons or foreign states regarding tax exemptions or other mutual limitations on tax sovereignty;

b. * ...

1. The government council may, after consulting the affected municipality, grant newly established enterprises that serve the interests of the Obwalden economy tax relief for the founding year and the subsequent nine years.

2. A substantial change in business activity is equated with a new establishment.

3. The granting of tax relief may be subject to conditions and requirements.

1. Natural persons are subject to tax liability based on personal affiliation if they have their tax residence or domicile in the canton.

2. A person has a tax residence in the canton if they reside here with the intention of permanent stay, or if federal law assigns them a special legal residence here.

3. A person has a tax domicile in the canton if they stay in the canton, regardless of temporary interruptions, while engaged in gainful employment for at least 30 days, or without gainful employment for at least 90 days.

4. A person does not establish a tax residence or domicile if they have their residence in another canton or abroad and stay in the canton solely to attend an educational institution or for care in a medical facility.

1. Natural persons without a tax domicile or residence in the canton are subject to tax based on economic affiliation if they

a. are owners, partners, or beneficiaries of businesses in the canton;

b. maintain business establishments in the canton;

c. own real estate located in the canton, possess usufruct rights, or have other real rights or economically equivalent personal usage rights;

d. engage in transactions involving real estate located in the canton.

2. A permanent establishment is defined as a fixed place of business where the business activities of a company or a freelance profession are carried out wholly or partially. Permanent establishments particularly include branches, manufacturing sites, workshops, sales outlets, permanent representation offices, mines, and other sites for the exploitation of natural resources, as well as construction or installation projects lasting at least twelve months.

**1. Natural Persons Without Tax Residence or Domicile in Switzerland Are Liable to Taxation Due to Economic Affiliation If They:**

a. engage in professional activities in the canton;

b. as members of the administration or management of legal entities with headquarters or a permanent establishment in the canton, receive royalties, meeting fees, fixed compensations, employee benefits, or similar remunerations;

c. are creditors or beneficiaries of claims secured by a real estate mortgage or a chattel mortgage on properties located in the canton;

d. receive pensions, retirement benefits, or other payments made due to a former public-law employment relationship from an employer or a pension institution with headquarters in the canton;

e. receive payments from Swiss private law occupational pension institutions or recognized forms of tied self-pension provision with headquarters or a permanent establishment in the canton;

f. receive wages or other compensations for work in international transportation on board a ship or aircraft, or for transport by road, from an employer with headquarters or a permanent establishment in the canton;

g. as creditors or beneficiaries of license agreements from debtors with headquarters or a permanent establishment in the canton, receive license fees or other benefits;

h. broker real estate located in the canton.

**2. If the remunerations do not accrue to the aforementioned persons, but to third parties, these third parties are liable for taxation in this regard.**

1. In the case of personal affiliation, the tax liability is unlimited; however, it does not extend to businesses, permanent establishments, and properties outside the canton.

2. In the case of economic affiliation, the tax liability is limited to the portions of income and assets for which a tax liability exists in the canton according to Articles 6 and 7 of this law. At a minimum, income earned in the canton and assets located in the canton must be taxed.

3. The delimitation of tax liability (tax allocation) for businesses, permanent establishments, and properties is carried out in relation to other cantons and foreign countries according to the principles of federal law concerning the prohibition of intercantonal double taxation. If a company with its headquarters in the canton has offset losses from a foreign permanent establishment against cantonal profits, but within the following seven years earns profits from this establishment, a revision of the original assessment must be carried out to the extent of the profits that can be offset in the state where the permanent establishment is located. In this case, the losses from this permanent establishment are considered in the canton retrospectively only for the purpose of determining the tax rate. In all other cases, foreign losses are taken into account solely for the purpose of determining the tax rate. The regulations contained in double taxation agreements remain reserved.

1. Natural persons who are liable to tax in the canton only on part of their income and assets shall pay tax on the values taxable in the canton at the rate corresponding to their entire income and assets; tax-free amounts shall be granted to them proportionally.

2. Taxpayers without a tax residence or domicile in Switzerland shall pay taxes on businesses, permanent establishments, and real estate in the canton at least at the rate corresponding to the income earned in the canton and the assets located here.

1. The tax liability commences on the day the taxpayers take up legal residence or domicile in the canton or acquire taxable assets within the canton.

2. The tax liability ends with the death or departure of the taxpayers from the canton or with the discontinuation of taxable assets within the canton.

3. The consequences of the commencement, change, and termination of tax liability due to personal and economic affiliations are determined in the inter-cantonal context by federal legislation on tax harmonization and by the principles of federal law concerning the prohibition of inter-cantonal double taxation.

1. Income and assets of spouses who live in a legally and factually undivided marriage shall be aggregated without regard to the matrimonial property regime.

1a. Income and assets of individuals who live in a legally and factually undivided registered partnership shall be aggregated. The status of registered partners in this law is equivalent to that of spouses. This also applies concerning maintenance contributions during the existence of the registered partnership, as well as maintenance contributions and the division of property in the event of separation and dissolution of a registered partnership.

2. Income and assets of children shall be attributed to the holder of parental authority until the beginning of the year in which they reach the age of majority.

3. For earned income and real estate gains, the child shall be taxed independently.

4. Income and assets of children under joint parental authority of parents who are not taxed jointly shall be attributed to the parent entitled to the child deduction pursuant to Art. 37 para. 1 subpara. b of this law.

1. Inheritance communities, simple partnerships, general partnerships, and limited partnerships are not subject to taxation as such; their income and assets are proportionately attributed to the individual heirs, legatees, or partners.

2. If the inheritance or the participations are uncertain, the income and assets are taxed as a whole according to the provisions applicable to natural persons.

3. ...

4. For the calculation of the taxable income and assets of partnerships according to paragraph 2, Articles 37 and 54 of this law are not applicable.

1. Income and Wealth of Collective Investment Schemes According to the Federal Act on Collective Investment Schemes are Attributed Proportionally to Investors. Excluded from this are collective investment schemes with direct real estate holdings.

1. Foreign Commercial Companies and Other Foreign Entities Without Legal Personality, Taxable Due to Economic Affiliation, Pay Their Taxes in Accordance with the Provisions for Legal Entities.

1. The heirs of the deceased assume their rights and obligations. They are jointly liable for the taxes owed by the decedent up to the amount of their inheritance shares, including advancements and insurance benefits accrued by reason of death.

2. The surviving spouse is liable with their inheritance share, including insurance benefits accrued by reason of death, as well as the amount received under marital property law from the surplus or community property exceeding the statutory share according to Swiss law.

1. Spouses living in a legally and factually undivided marriage are jointly and severally liable for the total tax. However, each spouse is only liable for their share of the total tax if one of them is insolvent. Furthermore, they are jointly and severally liable for that part of the total tax attributable to the income and assets of the children.

2. In the case of a legally or factually separated marriage, the joint and several liability ceases to apply to all outstanding tax debts.

3. Joint and several liability with the taxpayers applies to

a. Children under parental care up to the amount of their share of the total tax;

b. Partners residing in Switzerland in a simple partnership, general partnership, or limited partnership up to the amount of their partnership shares for the taxes of partners residing abroad;

c. Buyers and sellers of real estate located in the canton up to three percent of the purchase price for the tax owed by the dealer or intermediary from this activity, if the dealer or intermediary does not have a tax residence in Switzerland;

d. Persons who dissolve business enterprises or operating facilities in the canton or dispose of real estate located in the canton or claims secured by such real estate up to the amount of the net proceeds, if the taxpayers do not have a tax residence in Switzerland.

4. With the successors in tax liability, the estate administrators and executors are jointly and severally liable for the taxes of the deceased's estate up to the amount attributable to the estate's assets at the time of death, provided they perform this activity professionally. The liability ceases if the liable parties can prove that they have exercised all due diligence required under the circumstances.

5. If the succession or the participants are uncertain, so that income and assets are taxed as a whole, the heirs or participants are unlimited and jointly and severally liable.

1. The Finance Department may grant natural persons the right to pay a tax based on expenditure instead of income and property tax, if they

a. * do not have Swiss citizenship;

b. * are subject to unlimited tax liability (Art. 5 of this Act) for the first time or after an interruption of at least ten years; and

c. * do not engage in gainful employment in Switzerland.

2. Spouses who are legally and actually living in an undivided marriage must both meet the requirements of paragraph 1.

3-4

...

1. The tax, which replaces the income tax, is assessed based on the annual living expenses incurred by the taxable person and the persons supported by them during the assessment period, both domestically and abroad, but at least according to the highest of the following amounts

a. CHF 400,000;

b. for taxable persons with their own household: seven times the annual rent or the rental value according to Art. 23 para. 1 letter b of this law;

c. for other taxable persons: three times the annual pension cost for accommodation and board at the place of residence according to Art. 5 of this law.

2. The tax is calculated according to the ordinary tax rate.

3. The lump-sum wealth tax, which is calculated according to the ordinary tax rate, applies at least to the assets mentioned in paragraph 4. The assessment base is at least ten times the assessment base for the lump-sum income tax.

4. The tax based on expenditure must be at least as high as the sum of the income and wealth taxes calculated according to the ordinary rates on the total gross amount of

a. the immovable property located in Switzerland and its income;

b. the movable property located in Switzerland and its income;

c. the movable capital assets invested in Switzerland, including mortgage-secured claims, and their income;

d. the copyrights, patents, and similar rights exploited in Switzerland and their income;

e. the pensions and annuities deriving from Swiss sources; and

f. the income for which the taxable person claims full or partial relief from foreign taxes based on an agreement concluded by Switzerland to avoid double taxation.

5. If income from a state is only relieved of its taxes if Switzerland taxes this income alone or together with other income at the overall income rate, the tax is assessed not only according to the income referred to in paragraph 4 but also according to all components of income allocated to Switzerland based on the relevant double taxation agreement from the source state.

1. The beneficiaries exempt from tax under Article 2 paragraph 2 of the Host State Act of June 22, 2007, are not taxed to the extent federal law provides for a tax exemption.

2. In the case of partial tax liability, Article 9 paragraph 1 of this law applies.

1. Income tax applies to all recurring and one-time earnings.

2. Income also includes benefits in kind of any type, particularly free board and lodging as well as the value of products and goods consumed personally from one's own business; they are assessed at their market value.

3. Capital gains from the sale of private assets are tax-free; the separate taxation of property gains remains reserved.

1. Taxable are all incomes from private law or public law employment relationships, including additional incomes such as compensations for special performances, commissions, allowances, service anniversary and jubilee gifts, bonuses, tips, royalties, monetary benefits from employee participation, and other monetary benefits.

2. The costs of professional training and further education borne by the employer, including retraining costs, do not constitute any other monetary benefit within the meaning of paragraph 1, regardless of their amount.

3. Capital settlements from a pension scheme associated with the employment relationship or similar capital settlements from the employer are taxed according to Art. 40 of this law.

1. Genuine Employee Participations are deemed to include

a. Shares, profit-sharing certificates, participation certificates, cooperative shares, or other types of participations provided to employees by the employer, its parent company, or another group company;

b. Options to acquire participations as described in letter a.

2. Non-Genuine Employee Participations are deemed to include entitlements to mere cash settlements.

1. Cash Benefits from Genuine Employee Participations, except from Restricted or Non-Publicly Traded Options, are Taxable as Employment Income at the Time of Acquisition. The Taxable Benefit Corresponds to the Fair Market Value Reduced by any Purchase Price.

2. For Employee Shares, Vesting Periods must be Considered with a Discount of Six Percent per Vesting Year on their Fair Market Value for the Calculation of the Taxable Benefit. This Discount is Applicable for a Maximum of Ten Years.

3. Cash Benefits from Restricted or Non-Publicly Traded Employee Options are Taxed at the Time of Exercise. The Taxable Benefit Corresponds to the Fair Market Value of the Stock at Exercise Reduced by the Exercise Price.

1. Monetary benefits from non-genuine employee participations are taxable at the time they are received.

1. If the taxpayer did not have a tax residence or stay in Switzerland for the entire period between the acquisition and the vesting period of the restricted employee options according to Article 19b paragraph 3 of this law, the monetary benefits derived therefrom shall be taxed proportionally in relation to the total period compared to the period spent in Switzerland.

1. All income derived from a commercial, industrial, trade, agricultural, and forestry enterprise, from a liberal profession, as well as from any other self-employed activity is subject to taxation.

2. Income from self-employment also includes all capital gains from the sale, utilization, or accounting revaluation of business assets. Equated with a sale is the transfer of business assets into private assets or into foreign enterprises or permanent establishments.

3. Business assets are considered to be all assets that are entirely or predominantly used for self-employed activities. The same applies to participations of at least 20 percent in the share capital or basic capital of a corporation or cooperative, if the owner declares them as business assets at the time of acquisition. Article 20a of this law remains reserved.

4. For taxpayers who maintain proper accounting records, Article 78 of this law applies accordingly.

5. ...

6. Gains from the sale of agricultural and forestry real estate are attributed to taxable income to the extent of the difference between the acquisition costs and the book value relevant for taxation.

1. Dividends, profit shares, liquidation proceeds, and pecuniary benefits from shares, interests in limited liability companies, cooperative shares, and participation certificates, as well as profits from the sale of such participatory rights, are taxable to the extent of 50 percent after deduction of attributable expenses, provided that these participatory rights represent at least 10 percent of the share or nominal capital of a corporation or cooperative.

2. Partial taxation on capital gains is only granted if the sold participatory rights were in the ownership of the taxable person or partnership for at least one year.

1. If a property classified as fixed assets is transferred from business assets to private assets, the taxpayer may request that only the difference between the acquisition cost and the relevant income tax value be taxed at the time of the transfer. In this case, the acquisition cost is regarded as the new relevant income tax value, and the taxation of the remaining hidden reserves as income from self-employment is deferred until the property is sold.

2. The leasing of a business operation is only considered a transfer to private assets upon request of the taxpayer.

3. If a business operation is not continued by all heirs in the event of an inheritance division, the taxation of hidden reserves shall be deferred upon the request of the heirs taking over the business until a later realization, provided these heirs assume the values previously relevant for income tax purposes.

1. Article 79a of this Act shall apply mutatis mutandis to the deduction of research and development expenses in the case of self-employment.

1. Hidden Reserves of a Sole Proprietorship or Partnership are not taxed during restructuring, particularly in the case of mergers, demergers, or conversions, as long as the tax obligation continues in Switzerland and the values previously determining the income tax are adopted

a. during the transfer of assets to another sole proprietorship or partnership;

b. during the transfer of a business or a part of a business to a legal entity;

c. during the exchange of participation or membership rights in the course of restructuring pursuant to Art. 81 para. 1 of this law or merger-like consolidations.

2. In a restructuring under paragraph 1 letter b, the transferred hidden reserves are retrospectively taxed according to the procedure outlined in Arts. 230 to 232 of this law, insofar as participation or membership rights are sold at a price exceeding the transferred taxable equity within five years following the restructuring; in such a case, the legal entity can assert corresponding hidden reserves taxed as profit.

3. Paragraphs 1 and 2 shall apply mutatis mutandis to enterprises operated under joint ownership.

1. The provisions of Articles 78a and 78b of this law shall apply mutatis mutandis to income from patents and similar rights in the case of self-employed activities.

1. Taxable are the returns from movable capital, specifically

a. * Interest from deposits, including paid-out returns from redeemable life insurance policies with a single premium in case of survival or redemption, unless these life insurance policies serve retirement purposes. A policy is considered serving retirement purposes if the insurance benefit is paid out after the insured person has reached the age of 60, based on a contract that lasted at least five years and was entered into before the age of 66. In this case, the benefit is tax-free;

b. Income from the sale or redemption of bonds with predominantly one-time interest, such as full-interest bonds or discounted bonds, accruing to the holders;

c. * Dividends, profit shares, liquidation proceeds, and pecuniary benefits from participations of all kinds (including bonus shares, gratuitous nominal value increases, and the like). A liquidation surplus realized in the year of realization of the withholding tax claim from the return of participation rights as per Article 4a of the Federal Law on Withholding Tax to the corporation or cooperative is considered as realized in the year in which the withholding tax liability arises (Article 12, paragraphs 1 and 1bis of the Federal Law on Withholding Tax); paragraph 2 remains reserved;

d. Income from renting, leasing, usufruct, or other usage of movable objects or rights of use;

e. * Income from shares in collective investments, insofar as the total returns exceed the returns from direct real estate holdings;

f. Income from intangible assets.

2. Dividends, profit shares, liquidation proceeds, and pecuniary benefits from shares, shares in limited liability companies, cooperative shares, and participation certificates (including bonus shares, free nominal value increases, and the like) are taxable at a rate of 50 percent if these participation rights constitute at least 10 percent of the share or nominal capital of a corporation or cooperative.

3. Proceeds from subscription rights do not qualify as capital income, provided they belong to the private assets of the taxpayer.

4. ...

5. The repayment of contributions, premiums, and subsidies (reserves from capital contributions) made by the holders of participation rights after December 31, 1996, is treated the same as the repayment of share or nominal capital. Paragraph 6 remains reserved.

6. If a corporation or cooperative listed on a Swiss stock exchange does not distribute at least an equal amount of other reserves upon the repayment of reserves from capital contributions according to paragraph 5, the repayment is taxable to the extent of half the difference between the repayment and the distribution of the other reserves, but no more than the distributable legal reserves available in the corporation.

7. Paragraph 6 does not apply to reserves from capital contributions

a. that were created in quasi-mergers by transferring participation and membership rights in a foreign corporation or cooperative according to Article 81, paragraph 1, letter c, or by a cross-border transfer to a domestic subsidiary according to Article 81, paragraph 1, letter d after February 24, 2008;

b. that were already available in a foreign corporation or cooperative at the time of a cross-border merger or restructuring according to Article 81, paragraph 1, letter b and paragraph 4, or the relocation of the registered office or actual management after February 24, 2008;

c. in the event of the liquidation of the corporation or cooperative.

8. Paragraphs 6 and 7 apply mutatis mutandis to reserves from capital contributions used for the issuance of bonus shares or free nominal value increases.

9. If, upon the return of participation rights in a corporation or cooperative listed on a Swiss stock exchange, the repayment of reserves from capital contributions is not at least half of the received liquidation surplus, the taxable portion of this liquidation surplus decreases by half the difference between this portion and the repayment, but no more than the reserves from capital contributions available in the corporation attributable to these participation rights.

10. Paragraph 5 applies to contributions and premiums made during a capital band according to Articles 653s ff. of the Swiss Code of Obligations (CO) only insofar as they exceed the repayments of reserves within the framework of this capital band.

1. The following is also considered to be income from movable assets within the meaning of Article 22, paragraph 1, letter c of this Act

a. the proceeds from the sale of a participation of at least 20 percent in the share or capital stock of a corporation or cooperative from private assets to the business assets of another natural or legal person, provided that within five years after the sale, with the involvement of the seller, non-essential assets are distributed that were already available at the time of the sale and were distributable under commercial law; this applies accordingly even if multiple participants sell such a participation jointly within five years or if participations totaling at least 20 percent are sold; any distributed substance may be subsequently taxed at the seller in accordance with the procedures under Article 230, paragraph 1, Article 231, and Article 232;

b. * the proceeds from the transfer of a participation in the share or capital stock of a corporation or cooperative from private assets to the business assets of a sole proprietorship or a legal entity in which the transferor or contributor holds at least a 50 percent interest in capital after the transfer, insofar as the total consideration received exceeds the sum of the nominal value of the transferred participation and the reserves from capital contributions according to Article 22b of this Act; this applies accordingly even if multiple participants jointly undertake the transfer.

2. Participation within the meaning of paragraph 1 letter a occurs when the seller knows or must know that funds are withdrawn from the company to finance the purchase price and are not returned.

1. The repayment of contributions, premiums, and subsidies (reserves from capital contributions) made by holders of participation rights after December 31, 1996, is treated in the same manner as the repayment of principal or share capital. Paragraph 2 remains reserved.

2. If a corporation or cooperative that is listed on a Swiss stock exchange does not distribute other reserves to at least the same extent when repaying reserves from capital contributions as per paragraph 1, then the repayment is subject to taxation in the amount of half the difference between the repayment and the distribution of the other reserves, but up to the extent of the other reserves available in the company that are distributable under commercial law.

3. Paragraph 2 does not apply to reserves from capital contributions

a. that have been created during merger-like combinations by contributing participation and membership rights in a foreign company or cooperative under Art. 81 para. 1 letter c of this law or through a cross-border transfer to a domestic subsidiary under Art. 81 para. 1 letter d of this law after February 24, 2008;

b. that were already present in a foreign corporation or cooperative at the time of a cross-border merger or restructuring according to Art. 81 para. 1 letter b and para. 4 of this law or the relocation of the seat or actual management after February 24, 2008;

c. in the event of the liquidation of the corporation or cooperative.

4. Paragraphs 2 and 3 apply mutatis mutandis also to reserves from capital contributions used for the issuance of bonus shares or for free nominal value increases.

5. If, upon the return of participation rights in a corporation or cooperative listed on a Swiss stock exchange, the repayment of reserves from capital contributions is not at least half of the received liquidation surplus, the taxable portion of this liquidation surplus is reduced by half the difference between this portion and the repayment, but only up to the amount of the reserves from capital contributions available in the company that pertain to these participation rights.

1. **Subject to Taxation are the Income from Immovable Property, Particularly:**

a. all income from leasing, renting, usufruct, or other use;

b. the rental value of properties or parts of properties made available to the taxpayer for their own use based on ownership or a gratuitous right of use;

c. income from building right contracts;

d. income from the exploitation of water rights, gravel, sand, and other components of the soil.

2. The rental value referred to in paragraph 1 letter b is also subject to taxation if the property is rented or leased to a related person at a rent significantly deviating from the market value.

3. The governing council enacts the necessary implementing provisions for the uniform assessment of the imputed rental values of self-occupied non-agricultural properties or parts of properties. A schematic, formula-based evaluation of the imputed rental values may be provided. However, the following guidelines must be observed

a. the imputed rental value is to be set below 70 percent of the market value, considering the promotion of home ownership and private provision;

b. quality characteristics of the properties or parts thereof, which would significantly influence rent in the event of renting, must be adequately taken into account within the framework of a schematic, formula-based evaluation of the imputed rental values;

c. for properties or parts thereof that are self-occupied at the residence, the imputed rental value must also be determined considering the actual use.

4. For hardship cases, the governing council can provide a reduction in the imputed rental value of the primary residence.

1. Taxable are all incomes derived from the old-age, survivors, and disability insurance, from occupational pension schemes, and from recognized forms of restricted self-provision, including capital settlements and repayments of deposits, premiums, and contributions.

2. Incomes from occupational pension schemes particularly include benefits from pension funds, savings and group insurances, as well as vested benefits policies.

3. Annuity insurances, as well as annuity and endowment contracts, are taxable to the extent of their yield portion. This is determined according to Art. 7 para. 2 StHG.

4. Pensions and capital settlements from occupational pension schemes that began or became due before January 1, 1987, or that begin or become due before January 1, 2002, and are based on a pension relationship that already existed on December 31, 1986, are taxable as follows

a. at 60 percent, if the services (such as deposits, contributions, premium payments) on which the claim of the taxpayers is based were exclusively provided by the taxpayers;

b. at 80 percent, if the services on which the claim of the taxpayers is based were only partially, but at least 20 percent, provided by the taxpayers;

c. at the full amount in all other cases.

5. The services provided by taxpayers within the meaning of paragraph 4 are equated with the services provided by family members; the same applies to services provided by third parties if the taxpayers obtained the claim through inheritance, legacy, or gift.

6. Art. 26 letter b of this law remains reserved.

1. Other types of income that are particularly taxable include

a. all other income that substitutes income from gainful employment;

b. one-time or recurring payments in the event of death as well as for permanent physical or health disadvantages;

c. compensation for the relinquishment or non-exercise of an activity;

d. compensation for the non-exercise of a right;

e. * ...

f. * Maintenance contributions received by taxpayers upon divorce, judicial or actual separation for themselves, as well as maintenance contributions received by a parent for children under their parental care.

**1. The following are tax-exempt:**

a. Inheritances, bequests, gifts, or distributions from matrimonial property;

b. Capital accruals from redeemable private life insurance policies, with the exception of portability policies; Article 22 paragraph 1 letter a of this law remains reserved;

c. * Lump-sum payments made upon a change of employer by the employer or occupational pension institutions, provided the recipients use them within one year to purchase benefits from an occupational pension plan;

d. Support payments from public or private funds, including scholarships;

e. Benefits provided to fulfill family law obligations, excluding maintenance payments under Article 25 letter f of this law;

f. * Remuneration for military and protective service, as well as pocket money for civil service;

f1. * Remuneration for militia firefighters up to an amount of CHF 5,000 annually for services related to the fulfillment of core firefighting tasks (exercises, on-call services, courses, inspections, and emergency interventions for rescue, firefighting, general damage prevention, disaster management, and similar activities); excluded are flat-rate allowances for cadre, function allowances, and compensations for administrative work and services voluntarily provided by the fire brigade;

g. Payments of compensation for pain and suffering;

h. * Income pursuant to federal legislation on supplementary benefits to old-age, survivors, and disability insurance;

i. * Profits obtained from casino games at gaming establishments permitted under the Federal Act on Money Games, provided these profits do not originate from self-employment;

j. * Individual winnings up to an amount of 1 million francs from participating in large-scale games permitted under the Federal Act on Money Games and from online participation in casino games permitted under the Federal Act on Money Games;

k. * Winnings from small-scale games permitted under the Federal Act on Money Games;

l. * Individual winnings from lotteries and games of skill for sales promotion that are not subject to the Federal Act on Money Games per Article 1 paragraph 2 letters d and e, provided the limit of CHF 1,000 is not exceeded;

m. * Income pursuant to the Federal Act on Bridging Benefits for Older Unemployed Persons.

1. Determining the Net Income

To determine the net income, the expenses and general deductions pursuant to Articles 28 to 35a of this law shall be subtracted from the total taxable income.

1. The following professional expenses are deductible

a. * the necessary costs up to an amount of CHF 10,000 for commuting between home and workplace;

b. the necessary additional costs for meals outside the home and for shift work;

c. * the necessary costs for accommodation during weekly stays away from home;

d.-f. * ...

g. * the other costs necessary for the exercise of the profession; Article 35 paragraph 1 letter o of this law remains reserved.

2. ...

3. For the professional expenses referred to in paragraph 1, letters a, b, c, and g, flat-rate amounts are established; in the case of paragraph 1, letters c and g, taxpayers have the right to prove higher costs. The Cantonal Council regulates the details by ordinance.

1. In the case of self-employment, business or professional expenses justified by the activity are deducted.

2. These include, in particular

a. depreciations, provisions, value adjustments, and reserves according to Articles 30 and 31 of this Act;

b. losses incurred and recorded on business assets;

c. contributions to pension schemes for the benefit of one's own staff, provided that any misuse is excluded;

d. * interest on business debts and interest attributable to participations pursuant to Article 20, Paragraph 3 of this Act;

e. * costs of vocational training and further education as well as retraining costs for one's own staff;

f. * profit-siphoning sanctions, to the extent that they do not have a punitive purpose.

3. Non-deductible are, in particular

a. * payments of bribes as defined under Swiss criminal law;

b. * expenses to facilitate criminal offenses or as remuneration for committing criminal offenses;

c. * fines and penalties;

d. * financial administrative sanctions, to the extent that they have a punitive purpose.

4. If sanctions under Paragraph 3, letters c and d have been imposed by a foreign criminal or administrative authority, they are deductible if

a. the sanction violates Swiss public policy; or

b. the taxable person convincingly demonstrates that they have undertaken all reasonable means to comply with the law.

1. Commercially justified depreciation of assets is permissible to the extent that it is shown in the accounts or, in the case of simplified bookkeeping according to Art. 957 para. 2 CO, in specific depreciation tables.

2. Generally, depreciation is calculated based on the actual value of individual assets or reasonably distributed according to their expected useful life.

3. Depreciation on assets that have been revalued to compensate for losses may only be undertaken if the revaluations were permissible under commercial law and the losses would have been offsettable at the time of depreciation according to Art. 33 para. 1 of this law.

1. Permissible Charges to the Income Statement

a. Provisions for

1. Obligations existing in the fiscal year, the amounts of which are still undetermined;

2. Imminent risk of losses that exist in the fiscal year;

b. Write-downs for risk of losses associated with assets, particularly with goods and receivables;

c.-d. * ...

2. Previous provisions, write-downs, and reserves will be added to the taxable business revenue as far as they are no longer justified.

**1. Replacement of Essential Operating Fixed Assets**

When replacing essential operating fixed assets, hidden reserves can be transferred to a replacement asset; however, the transfer to assets outside of Switzerland is excluded. The taxation in case of replacement of real estate with movable assets remains reserved.

**2. Provision for Replacement Made in Different Fiscal Year**

If the replacement purchase does not occur in the same fiscal year, a provision in the amount of the hidden reserves may be made. This provision must be utilized within a reasonable period for depreciation on the replacement asset or be dissolved in favor of the profit and loss account.

**3. Definition of Essential Operating Fixed Assets**

Only fixed assets that serve the business directly are considered essential operating fixed assets; excluded are, in particular, assets that serve the company only as an investment or only through their income.

1. Losses from the seven fiscal years preceding the tax period can be deducted, provided they could not be considered when calculating the taxable income of those years.

2. Losses that arose in previous fiscal years and could not yet be offset against income may also be offset with contributions from third parties made to compensate for an undercapitalization in the context of a restructuring.

3. In the event of the liquidation of the company, all losses not yet offset against income can be deducted from the liquidation profit, provided the losses occurred in fiscal years that are to be considered according to paragraph 1.

4. Paragraphs 1 and 2 also apply in the event of a relocation of the tax domicile or the business location within Switzerland.

1. In the case of movable private assets, the costs of management by third parties and foreign withholding taxes that are neither reclaimable nor creditable may be deducted.

2. For real estate in private ownership, maintenance costs, costs of repairs for newly acquired properties, insurance premiums, and management fees by third parties may be deducted. The Cantonal Council regulates the distinction between maintenance and capital costs of properties by ordinance.

2a. Maintenance costs are equated with investments that promote energy savings and environmental protection, provided they are deductible for direct federal tax purposes. The same applies to demolition costs in anticipation of a replacement building. Deductible investment and demolition costs may be claimed in the two subsequent tax periods, insofar as they cannot be fully considered in the current tax period in which the expenses were incurred.

3. Also deductible are the costs of preservation work on monuments, which taxpayers have undertaken due to legal requirements, in agreement with authorities, or at their directive, provided these works are not covered by subsidies.

4. Taxpayers may claim a flat-rate deduction for privately owned real estate in lieu of actual costs and premiums. The Cantonal Council regulates further details by ordinance.

1. Deductions from Income

a. * Private interest on debt is deductible to the extent of taxable capital income pursuant to Arts. 22, 22a, and 23 of this Act and an additional 50,000 francs. Interest on loans that a corporation grants to a person with a substantial stake in its capital or a closely related natural person, under conditions that significantly deviate from those customary in business dealings among third parties, is not deductible;

b. * Permanent charges and the income portion pursuant to Art. 24 para. 3 of this Act from annuities and pension contracts;

c. * Maintenance payments to a divorced, judicially or in fact separated spouse, as well as maintenance payments to a parent for children under their parental care, but not payments fulfilling other family law maintenance or support obligations;

d. * Contributions, premiums, and payments made in accordance with law, charter, or regulation to old-age, survivors, and disability insurance and professional pension schemes;

e. * Contributions, premiums, and payments to acquire contractual claims from recognized forms of tied personal pension plans pursuant to Art. 82 BVG[10];

f. * Premiums and contributions for the income compensation scheme, unemployment insurance, and mandatory accident insurance;

g. * Contributions, premiums, and payments for life, health, and accident insurance not covered by item f, as well as interest from savings capital of the taxpayers and persons supported by them up to a total amount of Fr. 3,300 for married couples living in a legally and factually unseparated marriage and Fr. 1,700 for other taxpayers. The deductions increase

1. * by half for taxpayers without contributions pursuant to letters d and e;

2. * by Fr. 700 for each child or dependent person for whom a deduction under Art. 37 para. 1 sub. b and d of this Act can be claimed;

h. * Medical and accident costs of the taxpayers and persons maintained by them, insofar as the taxpayers cover the costs themselves and these exceed 5% of the taxable income reduced by the expenses pursuant to Arts. 28 to 35 of this Act;

i. * Disability-related expenses of the taxpayer or the persons maintained by them with disabilities under the Federal Act on the Elimination of Disadvantages for People with Disabilities[11], provided the taxpayer bears the costs themselves;

k. * ...

l. * Documented third-party care costs, up to a maximum of Fr. 10,000, for each child who has not yet reached the age of 14 and lives in the same household as the taxpayer responsible for their maintenance, as long as these costs are directly causally related to the taxpayer's employment, education, or inability to work;

m. * Membership fees and donations up to a total of Fr. 10,000 to political parties that

1. are registered in the party register in accordance with Article 76a of the Federal Act on Political Rights of December 17, 1976[12],

2. are represented in the Cantonal Council of the Canton of Obwalden, or

3. * obtained at least three per cent of the votes in the last general elections of the Cantonal Council in Canton Obwalden;

n. * Of individual winnings from participation in money games, which are not tax-exempt under Art. 26 para. 1 sub. i to l of this Act, five percent, but not more than Fr. 5,000, will be deducted as operating costs. For individual winnings from online participation in casino games under Art. 26 para. 1 sub. j of this Act, the stakes debited from the online player account during the tax year, but not more than Fr. 25,000, will be deducted;

o. * Costs of job-oriented education and training, including retraining costs, up to a total amount of Fr. 12,000, provided

1. there is a first degree at the secondary level II, or

2. the person has reached the age of 20 and it does not concern the education costs up to the first degree at the secondary level II.

2. If spouses live in a legally and factually unseparated marriage, an amount of Fr. 3,400 is deducted from the earned income of a spouse which is independent of the profession, business, or trade of the other spouse; a similar deduction is permissible for substantial involvement of a spouse in the profession, business, or trade of the other spouse. The secondary income deduction is subtracted from the lower of the two earned incomes.

3-4 ...

1. Deductions from income also include voluntary contributions of money and other assets to legal entities based in Switzerland, which are exempt from tax liability according to Art. 76 para. 1 lit. g of this law due to their public or exclusively charitable purposes.

2. It is required that the contributions reach CHF 100 in the tax year and do not exceed in total 20 percent of the taxable income reduced by all other expenses according to Articles 28 to 35 of this law in the year.

3. Corresponding voluntary contributions to the Confederation, cantons, municipalities, and their institutions are deductible to the same extent according to Art. 76 para. 1 lit. a to c of this law.

1. Non-deductible are the remaining costs and expenses, in particular

a. Expenses for the maintenance of the taxpayer and their family, as well as private expenses caused by the taxpayer's professional position;

b. * Costs of initial training up to the first completion at secondary level II;

c. Expenses for debt repayment;

d. Expenses for the acquisition, production, or enhancement of assets;

e. Income, property gain, transfer, inheritance, and gift taxes, wealth taxes of the federal government, cantons, and municipalities, as well as similar foreign taxes;

f. * ...

1. In calculating the taxable income, the following are deducted from the net income

a. * for married couples living in a legally and factually undivided marriage, as well as for widowed, legally or factually separated, divorced, and single taxpayers who live alone with children as defined in letter b or with dependent persons as defined in letter d in the same household and who predominantly provide for their maintenance, 20 percent of the net income, at least CHF 4,300, and at most CHF 10,000;

b. * CHF 6,200 for each minor child or child in occupational or educational training, for whose maintenance the taxpayer provides; if the parents are taxed separately, the child deduction is divided in half if the child is under joint parental custody and no maintenance contributions pursuant to Art. 35 para. 1 letter c of this Act are claimed for the child;

c. * if children, for whom the taxpayers can claim a deduction under letter b, are still in full-time school or vocational training after completing compulsory schooling and if the residence or place of stay of such children is different from the place of residence of the taxpayers for educational reasons, the taxpayers may claim an additional deduction of flat-rate CHF 5,100 for the additional costs incurred by them;

d. * as a support deduction for persons who are incapable of working or have limited work capacity, and for whose maintenance the taxpayers contribute at least the amount of the deduction, CHF 2,400 for each supported person. This deduction cannot be claimed for the spouse and for children for whom a deduction under letter b or Art. 35 letter c of this Act is granted;

e. * as a social deduction for the tax calculation

1. CHF 10,000 for married couples living in a legally and factually undivided marriage;

2. CHF 10,000 for other taxpayers;

f. as a special deduction

1. * for taxpayers living with children as defined in letter b in the same household and having a net income of less than CHF 100,000, 10% of the difference between CHF 100,000 and the net income. If the parents are taxed separately and the child deduction is divided in half, the special deduction should also be divided in half;

2. for married couples living in a legally and factually undivided marriage without children as defined in letter b and having a net income of less than CHF 75,000, 10% of the difference between CHF 75,000 and the net income;

3. for other taxpayers with a net income of less than CHF 50,000, 10% of the difference between CHF 50,000 and the net income.

2. The social deductions are determined based on the circumstances at the end of the tax period or tax liability.

3. If the tax liability exists only for part of the tax period, the social deductions are granted proportionally; for the rate determination, they are fully credited.

1. The basic tax on the taxable income for a tax year is 1.8 percent.

2. These rates apply to the entire taxable income amount. Remaining amounts under CHF 100.- are not taken into account.

3. ...

1. For small employment income from dependent gainful employment, the tax is to be levied at a rate of 4.5 percent without taking into account other income, any professional expenses, and social deductions; the condition is that the employer pays the tax as part of the simplified settlement procedure in accordance with Articles 2 and 3 of the Federal Act against Illegal Employment. This settles the income tax.

2. Article 209 paragraph 1 letter b of this Act applies mutatis mutandis.

3. The debtor of the taxable performance is obliged to periodically deliver the taxes to the competent AHV compensation fund.

4. The AHV compensation fund issues the taxpayer a statement or confirmation of the tax deduction. It transfers the collected tax payments to the competent tax authority.

5. The right to a collection commission under Article 209 paragraph 4 of this Act is transferred to the competent AHV compensation fund.

1. If a self-employed activity is definitively ceased after the completion of the 55th year of age or due to an inability to continue as a result of disability, the sum of the hidden reserves realized in the last two business years shall be taxed separately from the other income in accordance with Article 40 paragraphs 2 and 3 of this Act. Contributions for buy-in pursuant to Article 35 paragraph 1 letter d of this Act are deductible.

2. Paragraph 1 also applies to the surviving spouse, other heirs, and legatees, provided they do not continue the acquired business; the fiscal settlement shall occur no later than five calendar years after the end of the year of the decedent's death.

1. Lump-sum payments pursuant to Art. 24 of this Act, similar severance payments from the employer, as well as payments in cases of death and for permanent physical or health disadvantages, are taxed separately. If multiple lump-sum payments occur in the same tax period, the tax rate is determined based on the total amount of the lump-sum payments. Any assessments already made must be revised.

1a The tax is determined for the tax year in which the corresponding income was received.

2. The tax calculation is based on two-fifths of the rate that would be applicable for income equal to the taxable severance payment.

3. Social deductions pursuant to Art. 37 of this Act are not granted.

1. The entire net wealth, reduced by the tax-free amount in accordance with Art. 54 of this law, is subject to wealth tax. The net wealth consists of the excess of assets over liabilities.

2. Beneficiaries are attributed the usufruct assets.

3. For shares in collective investment schemes with direct real estate ownership, the difference in value between the total assets of the collective investment scheme and its direct real estate is taxable.

4. Household effects and personal items of use are not taxed.

1. Assets are valued at their market value. The income value may be duly considered.

2. Real estate is assessed at the taxable value, which is determined according to Articles 45 to 47 of this Act and must not exceed the market value.

1. The basis for the calculation of the tax value of non-agricultural properties is the real or income value determined by the tax administration.

2. The government council issues the necessary implementing provisions for a uniform assessment of non-agricultural properties. A schematic, formula-based evaluation may be provided, whereby appropriate consideration must be given to the quality features of the properties that would significantly influence the purchase price in the event of a sale. The formula must be chosen such that the estimates at the upper end of the range do not exceed 90 percent of the effective market value.

3. If the tax value does not correspond to the actual conditions, it can be determined by means of an individual appraisal based on recognized principles of property valuation.

4-5

...

1. The net taxable value for non-agricultural properties and agricultural properties pursuant to Art. 47 paras. 3 and 4 of this law shall be set by the Cantonal Council as a percentage of their tax value by regulation.

2. The net taxable value serves for the calculation of the

a. taxable assets of non-agricultural properties as well as agricultural properties pursuant to Art. 47 paras. 3 and 4 of this law;

b. * ...

c. * minimum tax on non-agricultural properties and properties pursuant to Art. 47 para. 3 of this law for natural and legal persons.

1. For properties used for agriculture and forestry, including the necessary economic buildings and the residence of the farm manager or the manager's residence, the tax value corresponds to the income value. Reservations are made for sections 3 and 4.

2. A property serves agriculture and forestry if it is used for the production and utilization of the natural fruits of the soil or for the rearing of animals, and the owner intends to maintain the property for these purposes or has acquired it for these purposes.

3. Properties acquired for the purpose of capital investment or obviously serving this purpose are taxed as non-agricultural properties.

4. Agricultural properties located within the building zone are taxed as non-agricultural properties.

1. Movable Property and Intangible Assets belonging to the business assets of the taxpayers shall be valued at the value relevant for income tax purposes.

2. Business Inventory, such as machines, tools, instruments, furniture, and chattels, shall be accounted for at the acquisition cost, reduced by depreciation.

3. Self-produced feed reserves for one’s own livestock are tax-exempt.

1. For securities, the market value is deemed to be the quoted value, and in the absence thereof, the intrinsic value.

2. Claims are accounted for at their nominal value. Any potential loss probability must be appropriately considered.

3. ...

4. Employee participations as per Art. 19b para. 1 of this Act are taxable at market value. Any blocking periods must be considered in accordance with Art. 19b para. 2 of this Act.

5. Employee participations as per Art. 19b para. 3 and Art. 19c of this Act are to be declared without taxable value upon allocation.

1. Surrenderable Capital and Pension Insurance Policies are Subject to Wealth Tax Based on Their Surrender Value.

1. Proven debts for which the taxpayers are solely liable are fully deductible, while other debts, such as solidarity and guarantor debts, are only deductible to the extent that they must be borne by the taxpayers.

2. ...

1. Deductions from the Net Assets for Tax Calculation

a. For spouses living in a legally and factually undivided marriage, CHF 50,000;

b. * For minor children or children undergoing vocational or educational training, for whom the taxpayers can claim the child deduction according to Art. 37 para. 1 lit. b of this Act, CHF 10,000 for each child; If the parents are taxed separately, the child deduction is split equally if the child is under joint parental custody and no maintenance contributions according to Art. 35 para. 1 lit. c of this Act are claimed for the child;

c. For all other taxpayers, CHF 25,000.

2. In cases of partial tax liability, the tax-free amount must be proportionally reduced.

3. The tax-free amounts are determined based on the circumstances at the end of the tax period or the tax obligation.

1. The basic tax on taxable assets for a tax year amounts to 0.2 per mille.

2. Remaining amounts under CHF 1,000 are not taken into account.

1. Natural persons are required to pay a minimum tax on all their properties located in the canton, instead of the regular taxes (income and wealth taxes), provided that the amount of the minimum tax is higher than the total amount of regular taxes payable by them in the canton.

2. The fixed minimum tax on properties is two per mille of the net taxable value of non-agricultural properties as per Art. 45 and Article 47 para. 3, and two per mille of the income value of agricultural properties according to Art. 47 para. 1 and 2 of this Act.

3. Exemptions from the minimum tax apply to

a. natural persons for properties primarily used for operating their own business;

b. natural persons for properties used to fulfill tasks in social housing.

1. In the case of income tax on natural persons, the effects of bracket creep are offset by a uniform adjustment of the deductions from income set in Swiss franc amounts by at least half.

2. The government council decides on the adjustment, which applies to the next tax period, if the national consumer price index has initially increased by at least seven percent compared to the index level at the end of October 2008 and subsequently compared to the index level relevant for the last adjustment. The relevant index level for an adjustment belonging to a tax period is the last October index level before the start of the respective tax period.

3. The adjustment pertains to the deductions according to Art. 35 para. 1 letter g, as well as para. 2 and Art. 37 para. 1 letters a, b, c, d, and e of this law.

1. Income and wealth taxes are determined for each tax period and levied for each tax year.

2. The calendar year is considered the tax period.

3. If the tax liability exists only during part of the tax period, the tax is levied on the income earned during this period. In this case, the tax rate for regularly flowing income is determined based on the income calculated for twelve months; irregularly flowing income is not adjusted for rate determination. Article 40 of this law remains reserved.

4. The deductions are applied mutatis mutandis according to paragraph 3 and Article 37 paragraph 3 of this law.

1. The taxable income is determined based on the earnings during the tax period.

2. For determining income from self-employment, the results of the fiscal years concluded during the tax period are decisive.

1. Taxpayers with self-employment activities must prepare a financial statement for each tax period and at the end of their tax obligation. No financial statement needs to be prepared if the self-employment activity is commenced only in the last quarter of the tax period.

1. Taxable Assets

The taxable assets are assessed based on their status at the end of the tax period or tax obligation.

2. For taxpayers engaged in independent professional activity, where the fiscal year does not coincide with the calendar year, the taxable business assets are determined according to the equity at the end of the fiscal year concluded within the tax period.

3. If the tax obligation exists only for part of the tax period, a tax corresponding to that period is levied.

4. If taxpayers inherit assets during the tax period or if the economic affiliation to another canton ceases during the tax period, paragraph 3 applies mutatis mutandis.

1. Taxpayers are first independently assessed for the tax period in which they reach the age of majority. However, a separate assessment of minors remains reserved, insofar as they earn employment income or are not under parental custody.

1. Upon marriage, spouses shall be jointly assessed for the entirety of the current tax period.

2. In the event of divorce or legal or actual separation, each spouse shall be taxed separately for the entire current tax period.

3. Upon the death of a spouse, the spouses shall be jointly taxed until the date of death. The death is considered the termination of the tax obligations for both spouses and the commencement of the tax obligations for the surviving spouse.

1. The tax rates applicable are those in effect at the end of the tax period.

**1. Taxable as legal entities:**

a. The corporations (public limited companies, companies limited by shares, and limited liability companies) and the cooperatives;

b. The associations, foundations, corporations, partial communities and alpine cooperatives, as well as the other legal entities.

**2. Equated with the other legal entities are the collective investment schemes with direct real estate ownership according to Art. 58 or Art. 118a of the Federal Act on Collective Investment Schemes. The investment companies with fixed capital according to Art. 110 of the Federal Act on Collective Investment Schemes are taxed like corporations.**

**3. Foreign legal entities, as well as foreign commercial companies and other foreign collectives without legal personality, which are taxable under Art. 13 of this law, are equated with those domestic legal entities to which they are legally or factually most similar.**

1. Legal entities are subject to taxation based on personal affiliation if their registered office or their actual administration is located within the canton.

1. Legal entities that neither have their domicile nor effective management in the canton are liable for taxes due to economic affiliation if they

a. are partners in businesses operating in the canton;

b. maintain permanent establishments in the canton;

c. * own real estate or have ownership rights, charges, or personal rights equivalent thereto in the canton;

d. * engage in transactions involving real estate located in the canton.

2. Legal entities domiciled and with effective management abroad are also liable for taxes if they

a. are creditors or usufructuaries of claims secured by real estate or chattel mortgage on properties in the canton;

b. * mediate real estate transactions located in the canton.

3. A permanent establishment is defined as a fixed place of business where the company's business activities are partially or entirely conducted. Permanent establishments specifically include branch offices, production facilities, workshops, sales outlets, permanent representatives, mines, and other locations for the extraction of natural resources, as well as construction or installation sites lasting at least twelve months.

1. **Unlimited Tax Liability for Personal Affiliation:** Tax liability is unlimited for personal affiliation; however, it does not extend to business operations, permanent establishments, and real estate outside the canton.

2. **Limited Tax Liability for Economic Affiliation:** Tax liability is limited to the portions of profits and capital for which a tax obligation exists in the canton pursuant to Article 71 of this law.

3. **Delineation of Tax Liability (Tax Apportionment):** The delineation of tax liability for business operations, permanent establishments, and real estate is determined in relation to other cantons and abroad according to the principles of federal law regarding the prohibition of inter-cantonal double taxation. A company with its headquarters in the canton can offset losses from a foreign permanent establishment against cantonal profits, provided these losses have not already been taken into account in the state of the permanent establishment. If this permanent establishment records profits within the subsequent seven fiscal years, taxation occurs in these fiscal years to the extent of the loss carryforwards compensated in the state of the permanent establishment. Losses from foreign real estate can only be considered if a permanent establishment is also maintained in the respective country. Provisions contained in double taxation agreements remain reserved.

4. **Tax Obligations for Entities with Headquarters and Actual Management Abroad:** Entities with headquarters and actual management abroad must at least tax the profit generated within the canton and the capital located in the canton.

1. The tax obligation commences with the incorporation of the legal entity, with the relocation of its registered office or its actual administration into the canton, or with the acquisition of assets subject to tax within the canton.

2. The tax obligation terminates with the conclusion of liquidation, with the relocation of the registered office and the actual administration outside the canton, or with the cessation of assets subject to tax within the canton.

3. If a legal entity transfers assets and liabilities to another legal entity, the taxes owed by it shall be paid by the acquiring legal entity.

4. The consequences of the commencement, modification, and termination of the tax obligation due to personal and economic affiliation are determined in the inter-cantonal context by federal legislation on tax harmonization and by the principles of federal law concerning the prohibition of inter-cantonal double taxation.

1. If the tax liability of a legal entity ends, then the individuals entrusted with its administration and liquidation are jointly and severally liable for the taxes owed by it up to the amount of the liquidation result or, if the legal entity relocates its domicile or actual administration abroad, up to the amount of the legal entity's net assets. Liability is waived if the liable party can prove that they have exercised all due diligence required by the circumstances.

2. For the taxes of a legal entity liable due to economic affiliation, individuals are jointly and severally liable up to the amount of the net proceeds if they

a. Dissolve business operations or establishments in the canton;

b. Sell or realize property in the canton or claims secured by such property.

3. Buyers and sellers of real estate located in the canton are jointly and severally liable for tax owed due to brokerage activity up to three percent of the purchase price if the legal entity facilitating the transaction has neither its domicile nor its actual administration in Switzerland.

4. For the taxes of foreign trading companies and other foreign entities without legal personality, the partners are jointly and severally liable.

**1. Exemption from Taxation:**

a. The Confederation and its institutions, in accordance with federal law;

b. The canton and its institutions;

c. Municipalities, public corporations, and institutions for their assets and income, insofar as these directly serve the fulfillment of their public duties;

d. * Transportation and infrastructure companies licensed by the Confederation that receive compensation for these activities or must maintain year-round operations of national significance due to their license; the tax exemption also extends to profits from licensed activities that are freely available; however, auxiliary operations and properties that have no necessary relation to the licensed activity are excluded from the tax exemption;

e. Institutions for occupational pensions of companies with a registered office or branch in Switzerland and of related companies, provided the institution's funds are permanently and exclusively used for personnel pensions;

f. Domestic social insurance and compensation funds, particularly unemployment, health, old-age, disability, and survivors' insurance funds, with the exception of licensed insurance companies;

g. Legal entities that pursue public or charitable purposes, for their profit and capital, which are exclusively and irrevocably dedicated to these purposes. Entrepreneurial purposes are generally not charitable. The acquisition and management of significant equity investments in companies are considered charitable if the interest in maintaining the company is subordinate to the charitable purpose and no management activities are conducted;

h. Legal entities that pursue cultural purposes at the cantonal or national level, for their profit and capital, which are exclusively and irrevocably dedicated to these purposes;

i. * Collective investment schemes with direct real estate ownership, provided their investors are exclusively tax-exempt occupational pension institutions under letter e or tax-exempt domestic social insurance and compensation funds under letter f;

k. * Foreign states for their domestic properties intended exclusively for the direct use of diplomatic and consular representations, as well as institutional beneficiaries exempted from tax according to Article 2, paragraph 1 of the Host State Act of June 22, 2007, for properties owned by institutional beneficiaries and used by their offices.

**2. Property profit tax and transfer tax are applicable to the legal entities mentioned in letters e to i of paragraph 1 in every case.**

**3. The legal entities mentioned in letters b and c of paragraph 1 are subject to property profit tax and transfer tax, insofar as the transfer is not in direct connection with fulfilling their public tasks.**

1. Subject of the Profit Tax is the Net Profit.

1. The taxable net profit comprises

a. the balance of the income statement, taking into account the carry-forward from the previous year;

b. all parts of the business result excluded before calculating the balance of the income statement, which are not used to cover business-related expenses, including in particular

1. costs for the acquisition, production, or enhancement of fixed assets;

2. non-business-related write-offs and provisions;

3. allocations to reserves;

4. contributions to equity from the legal entity's own funds, insofar as they do not originate from reserves taxed as profit;

5. open and hidden profit distributions and non-business-related contributions to third parties;

c. income not credited to the income statement, including capital gains, liquidation gains, and revaluation gains, subject to Article 84 of this law. For the purposes of undisclosed reserves, the relocation of the registered office, the management, a business operation, or a permanent establishment outside Switzerland is equivalent to a liquidation if such formation reduced the profit in Switzerland;

d. interest on hidden equity.

2. The taxable net profit of legal entities that do not prepare an income statement is determined analogously to paragraph 1.

1. The following are considered patents

a. Patents under the European Patent Convention of October 5, 1973, in its revised version of November 29, 2000, with designation for Switzerland;

b. Patents under the Patent Act of June 25, 1954;

c. Foreign patents equivalent to the patents under items a or b.

2. The following are considered comparable rights

a. Supplementary protection certificates under the Patent Act of June 25, 1954, and their extensions;

b. Topographies protected under the Topography Act of October 9, 1992;

c. Plant varieties protected under the Plant Variety Protection Act of March 20, 1975;

d. Documentation protected under the Medicinal Products Act of December 15, 2000;

e. Reports for which report protection is based on implementing provisions of the Agricultural Act of April 29, 1998;

f. Foreign rights equivalent to the rights under items a to e.

1. The net profit from patents and similar rights, upon application by the taxable person, is included in the calculation of the taxable net profit with a reduction of 90 percent, proportional to the qualifying research and development expenditure to the total research and development expenditure per patent or similar right (nexus fraction).

2. The net profit from patents and similar rights contained in products is determined by reducing the net profit from these products by 6 percent of the costs allocated to these products, as well as by the brand fee.

3. If the net profit from patents and similar rights is subject to reduced taxation for the first time (entry into the regime), the research and development expenditure already considered in past tax periods is taxed at a rate of 1 percent.

4. If the net profit from patents and similar rights is no longer subject to reduced taxation for the first time (exit from the regime), the research and development expenditure incurred in past tax periods can be credited against profit taxes at a rate of 1 percent upon application. The credit is limited to the amount levied at the entry according to paragraph 3. The application must be submitted no later than the finality of the assessment of the tax period in which the net profit from patents and similar rights is no longer subject to reduced taxation for the first time, otherwise the claim under this paragraph expires.

5. For due dates, Art. 244 par. 1 let. a and par. 2 of this law apply accordingly.

6. The government council enacts further provisions, in particular

a. for calculating the reduced taxable net profit from patents and similar rights, specifically regarding the nexus fraction;

b. for the application of the regulation to products that only have slight variations and are based on the same patents and similar rights;

c. for documentation obligations;

d. for the beginning and end of reduced taxation;

e. for the treatment of losses from patents and similar rights.

1. Also considered as business-related expenses are

a. federal, cantonal, and municipal taxes, but not tax penalties;

b. contributions under federal law to pension funds for the benefit of one's own staff, provided that any misuse is excluded;

c. voluntary donations of money and other assets up to 20 percent of the net profit to legal entities based in Switzerland, which are exempt from tax for public or exclusively charitable purposes according to Art. 76 letter g of this law, as well as to the Confederation, cantons, municipalities, and their institutions pursuant to Art. 76 letters a to c of this law;

d. discounts, rebates, sales bonuses, and refunds on payments for goods and services, as well as surpluses intended for distribution to the insured by insurance companies;

e. costs of career-oriented training and education and retraining costs for one's own staff;

f. sanctions aimed at profit reduction, provided they do not have a punitive purpose.

2. Not considered as business-related expenses are, in particular

a. payments of bribes as defined by Swiss criminal law;

b. expenditures to facilitate crimes or as compensation for committing crimes;

c. fines;

d. financial administrative sanctions, insofar as they have a punitive purpose.

3. Sanctions under paragraph 2 letters c and d imposed by a foreign criminal or administrative authority are deductible if

a. the sanction is against the Swiss ordre public; or

b. the taxable person credibly demonstrates that they have taken all reasonable measures to act in compliance with the law.

1. Upon application, research and development expenses that have incurred directly by the taxable person or indirectly through third parties within the country may be deducted by up to 50 percent in addition to the business-related research and development expenses.

2. Research and development are defined as scientific research and science-based innovation pursuant to Article 2 of the Federal Act of December 14, 2012, on the Promotion of Research and Innovation.

3. An increased deduction is permissible for

a. directly attributable personnel expenses for research and development, plus a surcharge of 35 percent of these personnel expenses, but not exceeding the total expenses of the taxable person;

b. 80 percent of expenses invoiced by third parties for research and development.

4. If the principal of the research and development is entitled to a deduction, the contractor is not entitled to any deduction for this purpose.

1. The total tax relief pursuant to Articles 78a, 78b paragraphs 1 and 2, and 79a of this law may not exceed 70 percent of the taxable profit before loss offsetting, excluding the net participation income according to Article 88 of this law, and before deduction of the reliefs granted.

2. Neither the individual reliefs nor the total tax relief may result in loss carryforwards.

1. No taxable gain arises from

a. Capital contributions from members of corporations and cooperatives, including premiums and grants made without obligation of repayment;

b. Relocation of the headquarters, management, a business operation, or a permanent establishment within Switzerland, provided no disposals or accounting revaluations are made;

c. Capital gain from inheritance, legacy, or gift.

1. Hidden reserves of a legal entity are not taxed during restructurings, particularly in the case of mergers, demergers, or conversions, provided that the tax liability continues in Switzerland and the values relevant for profit tax purposes are adopted

a. during the conversion into a partnership or another legal entity;

b. during the merger or demerger of a legal entity, provided that one or more businesses or parts of businesses are transferred and the existing legal entities after the demerger continue to operate a business or part of a business;

c. during the exchange of participation or membership rights in the course of restructurings or merger-like consolidations;

d. during the transfer of businesses or parts of businesses as well as business assets to a domestic subsidiary. A subsidiary is considered a corporation or cooperative in which the transferring corporation or cooperative holds at least 20 percent of the share or capital stock.

2. If a corporation or cooperative transfers an interest to a foreign group company, taxation is deferred for the difference between the profit tax value and the market value of the interest. The tax deferral lapses if the transferred interest is sold to a third party outside the group, if the company whose participation rights were transferred sells its assets and liabilities to a significant extent, or if it is liquidated.

3. In the case of a transfer to a subsidiary under paragraph 1, letter d, the transferred hidden reserves are subsequently taxed in accordance with the procedure under Art. 230 to 232 of this law, to the extent that within five years following the restructuring, the transferred assets or participation or membership rights in the subsidiary are sold; in this case, the subsidiary can claim corresponding hidden reserves taxed as profit.

4. Between domestic corporations and cooperatives, which, based on the overall picture of actual circumstances, are combined under the unified leadership of a corporation or cooperative through a majority of votes or otherwise, directly or indirectly held interests of at least 20 percent in the share or capital stock of another corporation or cooperative, businesses or parts of businesses as well as business assets can be transferred at values relevant for profit tax purposes as before. An exception is the transfer to a domestic subsidiary under paragraph 1, letter d.

5. If, in the case of a transfer under paragraph 4, the transferred assets are sold within the subsequent five years or if, during this time, the unified leadership is abandoned, the transferred hidden reserves are subsequently taxed in accordance with the procedure under Art. 230 to 232 of this law. The favored legal entity can claim corresponding hidden reserves taxed as profit in this case. At the time of breach of the restriction period, the domestic corporations and cooperatives summarised under unified leadership are jointly and severally liable for the back tax.

6. If the taking over of the assets and liabilities of a corporation or a cooperative, whose participation rights belong to the acquiring corporation or cooperative, results in a book loss on the interest, this cannot be deducted for tax purposes; any book gain on the interest is taxed.

7. During the restructuring of companies, the realized hidden reserves on participations deployed at book values of a corporation or cooperative are not taxed if the corporation or cooperative is recognized as a holding company according to Art. 89 of this law or if the corporation or cooperative transfers the participations to a holding company as a result of restructuring. If the participations are sold or revalued within ten years, a fixed annual tax of six percent of the capital gain or revaluation profit is levied. No deductions are granted on this gain.

1. Business-related justifiable depreciation of assets is permissible, as long as they are shown in the accounts, or, if commercial accounting is lacking, disclosed in special depreciation tables.

2. As a rule, depreciation is calculated based on the actual value of individual assets or appropriately distributed according to their expected useful life.

3. Depreciation on assets valued higher for the purpose of offsetting losses can only be undertaken if the revaluations were permissible under commercial law and the losses could have been offset at the time of depreciation pursuant to Article 86 of this Act.

4. Valuation adjustments as well as depreciation on the acquisition cost of equity investments, which fulfill the requirements of Article 88 paragraph 5 letter b of this Act, are attributed to the taxable profit, insofar as they are no longer justified.

**1. Charges to the Profit and Loss Account are Permissible:**

**a. Provisions for:**

1. obligations existing in the fiscal year, the amount of which is still indeterminate;

2. imminent risks of loss that exist in the fiscal year;

**b. * Adjustments for risks of loss associated with assets, particularly with goods and receivables; they may only be made to the extent of the probability of loss existing on the balance sheet date;**

**c.-d. * ...**

**2. Previously made provisions, adjustments, and reserves shall be added back to the taxable profit to the extent that they are no longer justified.**

1. In the event of the replacement of essential operating fixed assets, hidden reserves may be transferred to a replacement object; however, the transfer to assets located outside of Switzerland is excluded. The taxation remains applicable in the case of the replacement of real estate with items of movable assets.

2. Upon the replacement of participations, hidden reserves may be transferred to a new participation, provided that the disposed participation constitutes at least 10 percent of the capital stock or at least 10 percent of the profits and reserves of the other company, and was held by the corporation or cooperative as such for at least one year.

3. If the replacement acquisition does not occur in the same fiscal year, a provision may be created to the extent of the hidden reserves. This provision must be utilized for depreciation on the replacement object within an appropriate period or be released in favor of the income statement.

4. Only fixed assets that serve the operation directly are considered as essential; assets that serve the company merely as an investment or merely through their yield are specifically excluded.

1. If the taxable person reveals hidden reserves, including self-generated added value, at the commencement of tax liability, these are not subject to profit tax. However, hidden reserves of a corporation or cooperative from holdings of at least 10 percent of the share capital or equity or the profits and reserves of another company may not be revealed.

2. The commencement of tax liability is considered to be the transfer of assets, businesses, parts of businesses, or functions from abroad to a domestic business operation or a domestic permanent establishment, the end of a tax exemption under Article 76 of this law, as well as the relocation of the registered office or actual management to Switzerland.

3. The revealed hidden reserves must be depreciated annually at the rate applied for tax depreciation on the respective assets.

4. The revealed self-generated added value must be depreciated within ten years.

1. If the tax liability ends, any existing untaxed hidden reserves at that time, including the self-created added value, shall be taxed.

2. The termination of tax liability is deemed to occur with the transfer of assets, businesses, parts of businesses, or functions from the domestic to a foreign business or a foreign permanent establishment, the transition to a tax exemption according to Article 76, Paragraph 1 of this law, as well as the relocation of the registered office or the actual management abroad.

1. Membership fees to associations and contributions to the assets of foundations are not included in the taxable profit.

2. From the taxable income of associations, the expenses necessary to generate these incomes can be fully deducted, other expenses only to the extent that they exceed the membership fees.

3. Collective investment schemes are subject to profit tax on income derived from direct real estate holdings.

1. Profits of legal entities with altruistic purposes are not taxed, provided they do not exceed CHF 50,000 and are exclusively and irrevocably dedicated to these purposes.

1. Losses from the seven fiscal years preceding the tax period may be deducted from the net profit of the tax period, insofar as they could not be considered in the calculation of the taxable net profit of those years. Losses are also deemed to be considered if the minimum tax according to Art. 101 of this law was paid for a tax period. In this case, they are offset by the amount of the declared annual profit.

2. In the context of restructuring, contributions to compensate for an undercapitalization, which are not capital contributions within the meaning of Art. 80 letter a of this law, may also offset losses from previous fiscal years that could not yet be offset by profits.

3. Paragraphs 1 and 2 also apply in the case of relocation of the headquarters or the actual management within Switzerland.

1. The profit tax for corporations and cooperatives amounts to 6 percent of the net profit.

**1. The profit tax of a corporation or cooperative is reduced in proportion to the net income from participation rights to the total net profit, if the corporation or cooperative:**

a. holds at least 10 percent of the equity or share capital of another company;

b. holds at least 10 percent of the profit and reserves of another company; or

c. holds participation rights with a fair market value of at least one million Swiss francs.

**2. The net income from participations corresponds to the income from participations as defined in paragraph 1, reduced by the proportionate financing costs associated with it and by the proportionate management costs of five percent or the proven actual management costs. Financing costs include interest on debt and other costs economically equivalent to interest on debt. The income from participations also includes the capital gains on these participations as well as the proceeds from associated subscription rights. Article 310 of this law remains reserved.**

**3. Non-inclusion as participation income are:**

a. ...

b. Income that constitutes a business-related expense for the paying company or cooperative;

c. Revaluation gains on participations;

d. ...

**4. The income from a participation is not considered in the calculation of the reduction insofar as a write-down is made on the same participation at the expense of the taxable net profit, which is related to this income.**

**5. Capital gains are only considered in the calculation of the reduction:**

a. insofar as the proceeds from the sale exceed the acquisition cost;

b. provided that the sold participation constituted at least 10 percent of the equity or share capital of the other company or entitled to at least 10 percent of the profit and reserves of another company and was held as such by the corporation or cooperative for at least one year. If the participation percentage falls below 10 percent due to partial sale, the reduction can only be claimed for each subsequent capital gain if the participation rights had a fair market value of at least one million Swiss francs at the end of the tax year before the sale.

**6. Transactions that result in an unjustified tax saving within a group lead to an adjustment of the taxable net profit or a reduction of the reduction. An unjustified tax saving exists if capital gains and capital losses or write-downs on participations within the meaning of Articles 82 and 88 of this law are causally connected.**

**7. For group parent companies of systemically important banks according to Article 7 paragraph 1 of the Banking Act (BankG), the financing cost and the receivable in the balance sheet from internally passed-on funds are not considered for the calculation of net income according to paragraph 1, if these funds originate from debt instruments according to Article 11 paragraph 4 or Article 30b paragraph 6 or 7 letter b BankG, which have been approved by the Swiss Financial Market Supervisory Authority with a view to meeting regulatory requirements.**

1. The profit tax of associations, foundations, corporations, joint entities, alpine cooperatives, and other legal entities amounts to 6 percent of the net profit.

2. If these legal entities distribute the net profit predominantly based on the capital participation of the members or if they operate an industrial or commercial enterprise, they will be taxed as corporations.

3. ...

1. The profit tax on collective investment schemes (Art. 69 para. 2 of this law) amounts to 6 percent of the net profit.

1. The Allocation of Revenue from Profit Tax According to Articles 87, 91, and 92 of This Law Shall Be Distributed in the Proportion of 48 Percent Each for the Canton and the Municipality, and 4 Percent for the Church Municipality.

1. Subject of the Capital Tax is the Equity.

1. The taxable equity capital of corporations and cooperatives consists of the paid-in share or nominal capital, the participation capital, the disclosed reserves, and the hidden reserves formed from taxed profits.

2. At a minimum, taxable is the paid-in share or nominal capital, including the paid-in participation capital.

1. The taxable equity of corporations and cooperatives is increased by that portion of the debt capital that economically equates to equity.

**1. Taxable Equity of Corporations and Cooperatives in Liquidation**

As taxable equity for corporations and cooperatives that are in liquidation at the end of a tax period, the net assets are considered.

1. The taxable equity capital of associations, foundations, and other legal entities is deemed to be the net assets.

2. The net assets are determined according to the regulations applicable to natural persons.

3. For collective investment schemes, the portion of the net assets attributable to direct real estate holdings is considered taxable equity capital.

1. The Capital Tax for Corporations and Cooperatives is 0.01 per mille of the taxable equity capital.

1a. If the financial statements are denominated in a foreign currency, the taxable equity capital must be converted into Swiss Francs. The applicable exchange rate is the foreign exchange rate (selling) at the end of the tax period.

2. The annual tax, considering the income tax, must in all cases amount to at least CHF 500 per tax year, except for cooperatives of a self-help character without profit-seeking activities.

1. Equity of associations, foundations, corporations, partnerships, alpine cooperatives, and other legal entities under CHF 50,000.- is not taxed.

2. The capital tax for associations, foundations, corporations, partnerships, alpine cooperatives, and other legal entities is 0.01 per mille of the taxable equity.

1. Legal entities are required to pay a minimum tax for their real estate located in the canton, provided that this amount is higher than the payment by the legal entities based on the profit and capital tax.

2. The fixed minimum tax on real estate amounts to two per mille of the net tax value of the properties assessed as non-agricultural according to Art. 45 and 47 para. 3, and two per mille of the income value of the agricultural properties according to Art. 47 para. 1 and 2 of this law.

3. Exempt from the minimum tax are

a. legal entities for properties primarily operated for their own business activities;

b. legal entities for properties that they use to fulfill tasks in social housing construction.

4. If a legal entity holds a property where primarily the business of another legal entity is operated, the latter legal entity is exempt from the minimum tax, provided that both legal entities are under unified management.

1. The Distribution of Revenue from the Capital Tax According to Articles 98, 100, and 101 of This Law shall be conducted in a proportion of 48 percent each for the canton and the residential municipality, and 4 percent for the church municipality.

1. Taxes on net profit and equity, as well as minimum taxes, are determined and imposed for each tax period.

2. The fiscal year is considered the tax period.

3. In each calendar year, except in the founding year, financial statements including a balance sheet and profit and loss account must be prepared. Additionally, financial statements are required when relocating the registered office, management, a business operation, or a permanent establishment abroad, as well as upon completion of liquidation.

1. Net profit is determined based on the results of the tax period.

1a. If the financial statements are in a foreign currency, the taxable net profit must be converted into Swiss francs. The applicable rate is the average exchange rate (selling) of the tax period.

2. ...

3. If a legal entity is dissolved or relocates its seat, management, business operation, or permanent establishment abroad, the latent reserves formed from untaxed profits are taxed together with the net profit of the last financial year.

1. The taxable equity is measured at the end of the tax period.

2. For financial statements covering more or less than a year, the amount of the capital tax is determined by the duration of the fiscal year.

1. Applicable are the tax rates in effect at the end of the tax period.

1. Foreign employees without a settlement permit, who, however, have a tax residence or domicile in the canton, are subject to withholding tax on their income from dependent employment. Exempt from this are incomes that are subject to taxation under the simplified accounting procedure according to Article 39a of this law.

2. Spouses who live in a legally and factually undivided marriage are not subject to withholding tax if one of the spouses possesses Swiss citizenship or a settlement permit.

3. If the tax claim is endangered, the withholding tax may be retained or re-imposed as a security tax for an indefinite period.

1. Withholding Tax is calculated from the gross income.

2. Subject to taxation are

a. * Income from dependent employment according to Art. 106 para. 1 of this law, including ancillary incomes such as benefits in kind from employee participation as well as benefits in kind, but not the costs for occupational training and further education borne by the employer under Art. 19 para. 2 of this law;

b. * Substitute incomes;

c. * Benefits according to Art. 18 para. 3 of the Federal Act on Old-age and Survivors' Insurance (AHVG)[21].

3. Benefits in kind and gratuities are generally valued according to the rates applicable to the Swiss Old-age and Survivors' Insurance.

1. The government council establishes the guidelines in the implementing provisions on how the withholding tax rates are to be calculated. The tax rates applicable are those of the income tax for natural persons.

2. In calculating the deduction, standard amounts for professional expenses (Art. 28 of this law) and for insurance premiums (Art. 35 para. 1 let. d, f, and g of this law) as well as deductions for family burdens (Art. 37 of this law) are taken into account.

3. The deduction for spouses living in a legal and actual undivided marriage, who are both gainfully employed, is determined based on tariffs that consider their total income (Art. 11 para. 1 of this law), the standard amounts and deductions according to paragraph 2, as well as the deduction for both spouses’ employment (Art. 35 para. 2 of this law).

4. According to the federal implementing provisions, it is determined how particularly the 13th monthly salary, bonuses, irregular employment, hourly wages, part-time or secondary employment, as well as benefits under Art. 18 para. 3 AHVG and rate-determining elements are to be considered, and how to proceed with tariff changes, retroactive salary adjustments and corrections, as well as benefits before the start and after the termination of employment.

5. The rates that are to be included as direct federal tax in the cantonal tariff are to be determined in agreement with the Federal Tax Administration (FTA).

6. The tax deduction includes canton and municipal taxes, including the church tax and the fire brigade replacement levy, as well as the direct federal tax.

7. Municipal taxes are calculated based on the weighted average of municipal taxes in the calendar year preceding the tax year.

1. Individuals subject to withholding tax under Article 106, paragraph 1 of this Act shall be assessed retrospectively in the ordinary procedure if

a. their gross income in a tax year reaches or exceeds a certain amount; or

b. they possess assets and income that are not subject to withholding tax.

2. The amount pursuant to paragraph 1, subparagraph a, is determined by the federal implementing provisions.

3. A retrospective ordinary assessment also applies to anyone who lives in a legally and factually undivided marriage with a person under paragraph 1.

4. Persons with income and assets under paragraph 1, subparagraph b, must request the tax declaration form from the competent authority by March 31 of the year following the tax year.

5. The retrospective ordinary assessment applies until the end of the withholding tax obligation. This remains valid even in the event of separation.

6. The tax deducted at the source is credited without interest.

1. Persons subject to withholding tax under Article 106, Paragraph 1 of this Law, and who do not meet the requirements of Article 116, Paragraph 1 of this Law, shall, upon request, be assessed retrospectively in the ordinary procedure.

2. The request also applies to the spouse who lives with the applicant in a legally and factually undivided marriage.

3. It must be submitted by March 31 of the year following the tax year. For persons leaving Switzerland, the deadline for submitting the request ends at the time of deregistration.

4. If no retrospective ordinary assessment is made upon request, the withholding tax will replace the taxes of the Confederation, canton, and municipality assessed in the ordinary procedure on earned income. No additional deductions will be granted retrospectively.

5. Article 116, Paragraphs 5 and 6 of this Law are applicable.

1. The person previously taxed at source will be assessed in a regular procedure

a. from the beginning of the month following the issuance of the permanent residence permit;

b. from the beginning of the month following their marriage to a person holding Swiss citizenship or a permanent residence permit.

2. Divorce, as well as the de facto or legal separation from a spouse with Swiss citizenship or a permanent residence permit, will trigger the resumption of taxation at source at the beginning of the following month for a foreign worker without a permanent residence permit.

3. If an income is initially subject to regular taxation and then to withholding tax within a tax period, the taxpayer will be retrospectively assessed regularly for the entire year and until the end of the withholding tax obligation.

4. Any advance payments made before the transition to withholding taxation, as well as taxes deducted at source, are to be credited.

1. If taxpayers receive remuneration from debtors abroad and these are not borne by a permanent establishment or fixed place of business in Switzerland, they will be assessed through the ordinary procedure.

2. In such cases, the taxpayers are obligated to submit a tax return within the prescribed deadline.

1. Foreign residents who are cross-border commuters, weekly residents, or short-term residents are subject to withholding tax for the income earned in the canton from dependent employment in accordance with Articles 107 and 108 of this law. Exempt from this are incomes that are subject to taxation under the simplified accounting procedure pursuant to Article 39a.

2. Employees residing abroad who work in international transportation on board a ship or an aircraft, or in road transport, and receive wages or other compensation from an employer with a registered office or permanent establishment in the canton, are also subject to withholding tax in accordance with Articles 107 and 108 of this law; however, the taxation of seafarers for work on board an ocean-going vessel remains exempt.

1. Persons subject to withholding tax under Art. 120, paragraph 1 of this Act, may apply for a subsequent ordinary assessment for each tax period by March 31 of the year following the tax year, if

a. the majority of their income, including the income of the spouse, is taxable in Switzerland;

b. their situation is comparable to that of a taxpayer domiciled in Switzerland; or

c. such an assessment is necessary to claim deductions provided for in a double taxation agreement.

2. The tax deducted at source is credited without interest.

3. The conditions are determined according to the federal implementing provisions.

1. In the case of objectionable circumstances, particularly concerning the lump-sum deductions included in the withholding tax rate, the cantonal tax administration may ex officio request a subsequent ordinary assessment in favor of or against the taxpayer.

2. The conditions are determined by the implementing provisions of federal law.

1. Artists residing abroad, such as stage, film, radio, or television artists, musicians, and performers, as well as athletes and speakers, are subject to taxation for income derived from their personal activities conducted in the canton and for further associated remunerations. This also applies to income and remunerations that do not accrue directly to the artist, athlete, or speaker but instead to a third party who organized their activities.

2. The tax amounts to ten percent of the daily income from the taxable performance.

3. Daily income is understood as the gross income, including all allowances and fringe benefits, after deduction of production costs. These amount to

a. 50 percent of the gross income for artists;

b. 20 percent of the gross income for athletes and speakers.

4. The organizer responsible for the presentation in Switzerland is jointly liable for the tax.

5. The threshold of gross income from which the withholding tax is levied is determined by federal regulatory provisions.

1. Members of the administration or management of legal entities domiciled or effectively managed in Switzerland, who reside abroad, are subject to tax on the royalties, meeting fees, fixed compensations, employee participation schemes, and similar remunerations paid to them.

2. Members of the administration or management of foreign enterprises maintaining branches in Switzerland, who reside abroad, are subject to tax on the royalties, meeting fees, fixed compensations, employee participation schemes, and similar remunerations paid to them from these branches.

3. Taxable income is considered as the gross income, including all allowances and ancillary benefits. This also includes compensations paid not to the taxpayers themselves but to third parties.

4. The tax amounts to 10 percent of the taxable income.

5. The threshold of gross income from which withholding tax is levied is determined by the federal implementing provisions.

1. Creditors or beneficiaries residing abroad, holding claims secured by a mortgage or pledge on properties within the canton, are subject to a withholding tax on the interest paid to them.

2. Taxable income is considered to be the gross income. This includes interest not accruing directly to the taxpayer but rather to third parties.

3. The tax amounts to 15 percent of the taxable income.

4. The threshold of gross income from which the withholding tax is levied is determined by the federal implementing provisions.

1. Persons residing abroad who

a. receive pensions, annuities, capital payments, or other compensations due to a previous public-law employment relationship from employers or a provident fund with its seat or place of business in the canton,

b. receive pensions, capital payments, or other compensations from private-law occupational pension schemes or from recognized forms of tied self-provision with their seat or place of business in the canton,

2. Taxable income is considered to be the gross income.

3. The tax amounts to ten percent of the taxable income for pensions; capital payments are taxable according to Article 40 of this Act.

4. The amount of gross income from which the withholding tax is levied is determined according to the federal statutory implementing provisions.

1. Individuals who, at the time of receipt of pecuniary benefits from blocked employee options according to Article 19b paragraph 3 of this law, are residing abroad, shall be liable to tax on the pecuniary benefit proportionally pursuant to Article 19d of this law.

2. The tax amounts to 11.5 percent of the pecuniary benefit.

1. Withholding tax replaces the cantonal, municipal, and church taxes on earned income that would be assessed in the ordinary procedure; it is increased by the relevant rates for direct federal tax. No additional deductions are granted retroactively.

2. For dual-earner couples, an adjustment of the income determining the tax rate for the spouse can be provided.

1. The canton and the municipalities where the respective properties are located levy property taxes in the form of

a. capital gains taxes on property, and

b. property transfer taxes.

**1. The following are considered real estate according to the subsequent provisions:**

a. the properties;

b. the independent and permanent rights registered in the land register;

c. the mines;

d. the co-ownership shares in real estate.

**2. For tax purposes, components according to Art. 642 of the Swiss Civil Code (ZGB) belong to the respective real estate, but not their accessories.**

1. The capital gains tax is applicable to profits from the sale of real estate or shares of such property located in the canton, which

a. belong to private assets;

b. are of agricultural or forestry nature; the taxation of recovered depreciation according to Art. 20 para. 6 of this law is reserved;

c. * are owned by legal entities mentioned in Art. 76 para. 1 letter e to i of this law;

d. * are owned by legal entities mentioned in Art. 76 para. 1 letter b and c of this law, provided the sale is not directly related to the fulfillment of their public duty.

2. The following are treated the same as the sale of real estate

a. * Legal transactions that, in terms of control over a property, effectively and economically act as a sale (in particular purchase, exchange, contribution of a property into a partnership, a corporation or a cooperative, expropriation, compulsory auction, etc.);

b. Imposition of private-law servitudes or public-law ownership restrictions on a property, if these permanently and significantly impair the unrestricted management or the market value of the property and compensation is paid for this; the compensation is not subject to capital gains tax if it is taxed according to Art. 23 letter c or d of this law;

c. Transition of a property or shares thereof from private assets to business assets;

d. * ...

e. Transfer for consideration of a purchase option on a property, entry of third parties into a purchase contract, as well as remunerated waiver of the exercise of such acquired rights to properties.

f. * ...

1. Tax deferment shall occur upon transfer of ownership due to

a. Inheritance (succession, partition, legacy), anticipation of inheritance, or donation;

b. * Legal transactions between spouses in connection with marital property law as well as compensation for extraordinary contributions by a spouse to the family's maintenance (Art. 165 Swiss Civil Code), compensation of value-added shares (Art. 206 Swiss Civil Code), and compensation for divorce-related claims, provided that both spouses agree;

c. * Land consolidation for the purpose of merging properties, district planning, boundary adjustment, rounding off agricultural homesteads, as well as in the case of land consolidation in expropriation procedures or imminent expropriation;

d. * Complete or partial disposal of a self-managed agricultural or forestry property, provided the proceeds from the sale are reinvested within a reasonable period for the acquisition of a self-managed replacement property located in Switzerland or for the improvement of one's own self-managed agricultural or forestry properties;

e. * Disposal of a permanently and exclusively self-used residential property or self-used shares thereof (single-family house or condominium), provided the proceeds thereby achieved are used within a reasonable period for the acquisition or construction of a similarly used replacement property in Switzerland;

f. * Legal transactions by companies that are exempt from tax under Art. 76 para. 1 lit. d to i of this law and occur within the framework of restructuring in the sense of Art. 81 of this law.

2. The tax deferment according to paragraph 1 letters d and e must be requested in writing by the taxable person.

3. The tax deferment according to paragraph 1 letters d and e applies only to the extent that the amount reinvested in the replacement property exceeds the investment costs of the disposed property.

4. The deferred taxation according to paragraph 1 letters d and e will be retrospectively taxed in the procedure according to Art. 230 of this law if the replacement property is disposed of or permanently repurposed.

1. If the out-of-canton replacement property is sold or put to another use after tax deferral in the canton, the deferred property gain must be taxed in the canton of Obwalden during the first five years. After the expiration of five years, it shall be taxed in the canton where the replacement property is located.

2. If the deferred property gain cannot be taxed in the other canton, or if the other canton waives the right to tax in favor of the canton of Obwalden, the original assessment shall be revoked and the deferred gain shall be taxed.

1. If the intra-cantonal replacement property is sold or put to another use after a deferred taxation within the canton, the deferred property gain must be subsequently taxed at the original location of the property.

2. If the intra-cantonal replacement property is sold or put to another use after a deferred taxation within the canton after the expiration of five years, the deferred gain must be subsequently taxed at the location of the replacement property.

1. Taxable persons are those who dispose of a property.

2. If an unincorporated association disposes of a property, the tax, calculated based on the total profit, is owed jointly and severally by all participants.

3. In the case of an exchange, several legal transactions form the basis. Each person involved is individually liable for the tax.

4. The tax claim arises with the disposal.

1. The capital gain on real estate consists of the difference between the sale proceeds and the acquisition costs.

2. The relevant factor for calculating the capital gain on real estate is the last taxable sale without tax deferral.

1. The proceeds of sale shall be deemed to be the purchase price, including all additional performances by the acquirer.

2. If real estate is transferred from private assets to business assets, the proceeds shall be deemed to be the value at which the property is recorded in the company's balance sheet.

3. If no purchase price is set, the market value applicable at the time of the sale shall be decisive.

4. In the case of an exchange, the proceeds of sale shall be deemed to be the market value of the exchanged property.

1. The acquisition cost consists of the purchase price and the value-enhancing eligible expenses.

2. Upon the disposal of a property for which the taxation was deferred in accordance with Art. 145, letters d and e of this law or a corresponding provision of another canton at the time of acquisition, construction, or improvement, the reinvested deferred gain shall be deducted from the acquisition cost.

3. ...

1. The purchase price is considered to be the acquisition price, including all additional services provided by the purchaser.

2. However, the acquisition price is not decisive if the property was acquired through a tax-deferred sale. In such cases, the acquisition price that was applied during the last transaction triggering taxes is decisive.

3. If an agricultural or forestry property was transferred from the business assets to the private assets, the book value relevant for tax purposes at the time of the transfer, increased by any recaptured depreciation, is deemed to be the acquisition price.

1. The following are considered as value-enhancing expenditures

a. Expenditures for construction, renovations, development, land improvements, and other permanent enhancements to the property, after deducting any insurance payments and contributions from the federal government, canton, or municipality; construction loan interest and ground lease interest are only considered as expenditures if they could not be deducted from income as debt interest according to Article 35, Paragraph 1, Letter a of this law;

b. Landowner contributions, such as connection fees and perimeter contributions for development facilities, land improvements, water construction, and avalanche protection;

c. * Expenditures associated with the acquisition and sale of the property, including commissions and brokerage fees at standard rates, insofar as they are not already included in the purchase price. These expenditures can be claimed in addition to the lump sum according to Article 152a, Paragraphs 1 and 2 of this law.

2. Expenditures incurred during the significant period of ownership are eligible.

1. If the property is developed at the time of the sale and has been owned by the taxpayer for more than ten complete years, the investment costs are standardized, unless higher investment costs are evidenced. The standardized amount is calculated as a percentage of the sales proceeds.

Duration of Ownership (started years) | Standardized percentage of sales proceeds

11 | 80

12 | 79

13 | 78

14 | 77

15 | 76

16 | 75

17 | 74

18 | 73

19 | 72

20 | 71

21 | 70

22 | 69

23 | 68

24 | 67

25 | 66

After 25 completed years | 65

2. If the property is undeveloped at the time of the sale and has been owned by the taxpayer for more than ten complete years, the investment costs are standardized, unless higher investment costs are evidenced. The standardized amount is calculated as a percentage of the sales proceeds.

Duration of Ownership (started years) | Standardized percentage of sales proceeds

11 | 64.0

12 | 63.3

13 | 62.4

14 | 61.6

15 | 60.8

16 | 60.0

17 | 59.2

18 | 58.4

19 | 57.6

20 | 56.8

21 | 56.0

22 | 55.2

23 | 54.4

24 | 53.6

25 | 52.8

After 25 completed years | 52.0

3. Higher investment costs are credited, provided that the taxpayer can fully substantiate them.

1. The acquisition costs relevant for the capital gains tax of agricultural and forestry properties belonging to business assets correspond to the book value plus the depreciation previously carried out in accordance with Article 20, paragraph 6 of this Act.

2. However, the acquisition price contained in these acquisition costs is not decisive insofar as the property was acquired through a tax-deferring disposal. In such cases, the acquisition price that was the basis of the last tax-triggering disposal is decisive.

1. If properties or shares in such properties acquired at different times are sold together, the profit must be determined separately for each.

1. In the case of parcel-by-parcel sale, the total purchase price must be allocated proportionally to the individual parcels.

2. Expenses are deductible to the extent that they pertain to the sold parcel; non-separable expenses are deductible proportionally.

3. Losses from partial sales may be attributed to the acquisition costs of parcels or condominium properties sold at a profit.

1. The simple real estate capital gains tax amounts to 2 percent of the real estate gain.

2. Real estate gains under CHF 5,000 are not taxed.

1. The Capital Gains Tax on Real Estate Increases in the Event of an Ownership Period of

a. Less than one year by 30 percent;

b. From one to less than two years by 20 percent;

c. From two to less than three years by 10 percent.

2. Relevant for the determination of the ownership period of a property subject to the capital gains tax is the last taxable sale. The transfer from business assets to private assets interrupts the ownership period.

3. ...

4. If the property was acquired through a tax-deferred sale, the calculation of the ownership period will be based on the last sale that did not or would not have resulted in tax deferral.

5. ...

1. A transfer tax is levied on the sale of real estate or shares in such properties.

2. The following are equated with real estate sales

a. Transactions that, with respect to the power of disposition over real estate, effectively and economically function as a sale (including, in particular, sale, exchange, contribution of real estate into a partnership, a corporation, or a cooperative, expropriation, forced sale, etc.);

b. Encumbrances on real estate with private-law servitudes or public-law ownership restrictions, provided that these permanently and substantially impair the unrestricted management or the market value of the real estate, and the encumbrance is made for consideration;

c. The paid transfer of a purchase right of real estate, the entry of third parties into a purchase contract, as well as a paid waiver of exercising such acquired rights on real estate.

3. In the case of an exchange, multiple transactions are involved. Each constitutes a sale.

1. The land transfer tax is to be paid by the transferring and the acquiring party in equal parts under joint and several liability, unless otherwise agreed. The joint and several liability cannot be waived.

2. If a group of persons without legal personality sells or acquires a property, the half of the tax incurred as per paragraph 1 is owed jointly and severally by all participants of the group of persons.

3. If the transferring or acquiring party is exempt from the land transfer tax in accordance with Art. 159 para. 1 lit. i as well as paras. 2 and 4 of this law, the party that cannot claim a tax exemption owes half of the tax.

1. Exemptions from the Property Transfer Tax are granted for transfers of real estate in the following cases

a. * when the purchase price is below CHF 5,000.-;

b. inheritance (succession, division of estate, legacy), advancement on inheritance, or gift;

c. * legal transactions between spouses, direct relatives ascending or descending, including adoptive and stepchildren, parents-in-law, son-in-law, and daughter-in-law, between siblings, as well as in the event of divorce;

d. land consolidations, neighborhood planning, boundary adjustments, smoothing out agricultural homesteads, and road construction;

e. * restructurings as defined in Articles 21 and 81 of this Act;

f.-h. * ...

i. enforcement proceedings for the debtor, the bankruptcy estate, the pledge creditors, the pledge owner, and the pledge guarantor, provided that creditors incur a loss;

k. conversion of joint ownership into co-ownership and vice versa, without changes in the person or extent of participation; in the case of a change in participation, the property transfer tax is due on the increase;

l. physical division of communal property, provided the allocated parcels correspond to the previous shares; in the case of changes in shares, the property transfer tax is due on the increase.

2. A person who transfers property is exempt from the property transfer tax in the following cases

a. sale of property that is part of essential operational fixed assets, to the extent the proceeds are used within a reasonable period for acquiring new or improving one's own substitute property in the canton;

b. * complete or partial sale of self-operated agricultural or forestry land, to the extent the proceeds are used within a reasonable period for acquiring self-operated substitute property or improving one's own self-operated agricultural or forestry land in the canton;

c. * sale of a permanently and exclusively owner-occupied residential property or owner's shares therein (single-family home or condominium), to the extent the proceeds are used within a reasonable period for acquiring or constructing an owner-occupied substitute property in the canton.

3. The tax exemption under subsection 2 letters a to c is revoked in supplementary taxation proceedings if the substitute property is sold or permanently directed to another use. The jurisdiction for supplementary taxation is governed by Articles 145a and 145b of this Act.

4. In the sale of real estate, the following are exempt from the property transfer tax

a. the Confederation and its institutions as per federal law;

b. the canton and its institutions, the municipalities, and public corporations and institutions, to the extent the sale is directly related to fulfilling their public duties, as well as the associations of municipalities;

c. foreign states within the framework of Art. 76 letter i of this Act.

1. Basis for Assessment of the Real Estate Transfer Tax is the purchase price of the property, including all additional services of the acquirer, exclusive of value-added tax. If no purchase price is agreed upon, the market value at the time of the sale is decisive.

1. Basis for Assessment of the Property Transfer Tax for Agreed Periodic Payments is their Present Value.

2. The Cantonal Council regulates the details by ordinance.

1. The real estate transfer tax amounts to 1.5 percent of the value of the property serving as the assessment basis.

1. The revenue from the real estate transfer tax shall be equally divided between the canton and the resident municipality.

1. The property transfer tax becomes due upon the sale.

1. The Executive Council exercises supervision over the entire taxation system. It appoints the head of the cantonal tax administration and the cantonal financial administration.

2. It issues the implementing provisions prior to each main assessment.

1. The Department of Finance oversees the entire taxation system. It is responsible for the head of the cantonal tax administration and the cantonal financial administration.

1. The cantonal tax administration is a direct organ of the Department of Finance in managing the tax system.

2. It is responsible for the execution of this law, insofar as no special authorities are designated.

3. It is particularly responsible for uniform tax assessments.

4. The Cantonal Council regulates the organization of the tax administration by ordinance.

1. The cantonal tax administration is the direct organ of the Department of Finance for tax collection.

2. It is responsible for uniform tax collection, the issuance of tax decrees, and the settlement of accounts with the municipalities.

1. The municipal communities cooperate in the preparation of the tax assessment foundations in accordance with the instructions of the cantonal tax administration. In particular, they are responsible for correcting the register of taxpayers.

1. The competent assessment authority acts as the objection authority.

**1. Appellate Authority**

The independent cantonal Tax Appeal Commission, separate from the tax authority, acts as the appellate authority. It comprises a president, four members, and three substitute members, all elected by the cantonal council for a term of four years.

2. The president has the authority to independently decide on all appeals where the disputed tax amount does not exceed CHF 1,000.

3. The secretariat of the cantonal Tax Appeal Commission is appointed by the governing council.

4. Members of the cantonal tax administration are not eligible to be elected as members or as the secretary of the cantonal Tax Appeal Commission.

1. The taxpayers and the cantonal tax administration may appeal the decision of the cantonal tax appeal commission to the administrative court.

1. Individuals who are required to make a decision or participate in a significant manner in a measure or decision during the execution of this law are obliged to recuse themselves if they

a. have a personal interest in the matter;

b. are related to a party in a direct line or collateral line up to the third degree, or are related by marriage, registered partnership, de facto cohabitation, or adoption;

c. represent a party or have acted for a party in the same matter;

d. may be biased in the matter for other reasons.

2. The reason for recusal can be invoked by all participants in the proceedings.

3. If a recusal reason is disputed, then for administrative employees, the superior authority decides, and for members of collegial authorities, the collegial authority decides.

1. Any person entrusted or involved with the execution of this law must maintain confidentiality regarding any facts that become known to them in the exercise of their duties, and must also refuse third parties access to official documents.

2. Disclosure of information is permissible insofar as there is a legal basis for it either in federal law or in cantonal law. A corresponding request must be submitted, upon which the head of the cantonal tax administration will decide.

**1. The authorities entrusted with the enforcement of this law shall support each other in the fulfillment of their duties; they are required to provide the necessary information to the tax authorities of other cantons free of charge and, upon request, allow them access to official records. The facts reported or determined in the application of this provision must be kept confidential.**

**2. If a person with residence or place of business in the canton is also liable to tax in another canton according to the tax declaration, the tax authorities of that canton shall be informed of the tax declaration and the assessment.**

1. The authorities, departments, and offices of the canton and municipalities shall provide the tax authorities entrusted with the enforcement of this law with all necessary information free of charge upon request. They may also notify these authorities on their own initiative if they suspect that an assessment is incomplete.

2. The same duty to provide administrative assistance applies to the bodies of corporations and institutions, insofar as they perform tasks of public administration.

3. The data shall be transmitted individually, in lists, or on electronic data carriers. They may also be made accessible through a retrieval procedure.

4. The residents' registration office shall report all changes related to taxable persons to the cantonal tax administration.

5. The land registry offices shall immediately report to the cantonal tax administration all legal transactions that may be subject to property gains and transfer taxes.

1. The tax administration shall provide the administrative and judicial authorities, as well as their implementing bodies, with all necessary information upon request, insofar as there is an overriding public interest and insofar as these authorities require the information to fulfill their legal duties.

2. The tax administration shall notify the commercial register if, within three months after the expiration of the corresponding deadlines, the legal entity has not submitted a signed annual financial statement pursuant to Art. 191 para. 2 lit. a of this law.

1. The tax administration operates an information system to fulfill its tasks. It is authorized to store particularly sensitive personal data concerning administrative and criminal sanctions that are significant for tax purposes.

2. For the provision of administrative assistance pursuant to Articles 178 to 179a of this law, data can be transmitted individually, in lists, or on electronic data carriers. The data may also be made accessible through a retrieval procedure. The head of the cantonal tax administration determines the type and scope of data retrieval as well as the access permissions.

3. Particularly sensitive personal data may only be made accessible through a retrieval procedure if it is indispensable for the fulfillment of a legal task.

4. In other respects, insofar as this law does not contain any deviating provisions, the provisions of the cantonal data protection law shall apply accordingly.

5. The tax administration and the authorities pursuant to Article 178 of this law are entitled to systematically use the insurance numbers of the Old-Age and Survivors’ Insurance according to the provisions of the AHVG for the fulfillment of their legal tasks.

1. Spouses who live in a legally and factually undivided marriage exercise the procedural rights and obligations granted to taxpayers under this law jointly; paragraph 5 remains reserved.

2. They jointly sign the tax return in paper form. If the tax return is signed by only one of the spouses, the non-signing spouse will be granted a corresponding deadline. If this period expires without being used, contractual representation between spouses is assumed.

3. Appeals and other submissions are considered timely if one spouse acts within the deadline.

4. All communications from the tax authority to married taxpayers living in a legally and factually undivided marriage are addressed to the spouses jointly.

5. For real estate capital gains and property transfer taxes, each spouse must exercise the procedural rights and obligations granted to taxpayers under this law individually.

1. Taxpayers have the right to inspect files submitted by them or signed by them. Spouses subject to joint assessment have a mutual right to file inspection.

2. Other files are open for inspection by the taxpayers, provided that the determination of the facts has been completed and unless public or private interests oppose it.

3. The request for inspection of files not submitted by or signed by the taxpayers must be submitted to the assessment authority, which will decide on the matter.

4. If taxpayers are denied access to a file document, it may only be used to their detriment if the authority has informed them of the essential content of the document orally or in writing and has also given them the opportunity to express themselves and present counter-evidence.

5. At the request of the taxpayers, the authority confirms the denial of file inspection with a decree, which can be contested by appeal.

6. The right to inspect files according to paragraphs 1 to 5 also applies to the heirs of deceased taxpayers.

1. Evidence Offered by Taxpayers

The evidence offered by taxpayers must be admitted insofar as it is suitable to establish significant facts for the assessment.

1. The assessment authority determines the tax factors (taxable income and assets, taxable net profit and taxable capital), the tax rate, the tax multiplier, and the tax amounts in the assessment notice. Furthermore, corporations and cooperatives are informed of the status of the equity capital after the assessment of the profit tax and consideration of profit distributions.

2. If the whereabouts of taxpayers are unknown or they are abroad without having a representative in Switzerland, a decision can be legally communicated to them by publication in the cantonal official gazette.

1. Taxpayers may be represented by contract before the authorities entrusted with the enforcement of this law, as long as their personal participation is not necessary. If a representative is authorized in the tax return, the assessment is to be delivered to the authorized person.

2. Persons who are legally competent and hold civil honor and rights are admitted as representatives. The authority may request the representative to provide proof of authorization through a written power of attorney.

3. Legal entities and associations of persons are also admitted to representation, provided their organs or partners meet the requirements of paragraph 2.

4. If spouses who live in a legally and factually undivided marriage do not designate a joint representative or a joint address for service, all notifications shall be served jointly to the spouses.

5. Notifications to spouses who live in a legally or factually separated marriage shall be served separately to each spouse.

1. The time limits prescribed by law cannot be extended.

2. A deadline set by an authority or administrative office can be extended if sufficient reasons are given and the request for an extension is submitted within the original time period.

3. ...

4. For the calculation of time limits as well as the reinstatement of time limits, the provisions of the Ordinance on Administrative Court Procedure apply mutatis mutandis. The provisions on the suspension of time limits do not apply.

5. The government council shall determine the commencement of time periods in implementation provisions for electronic delivery of orders and other communications.

1. The right to levy a tax prescribes five years after the end of the tax period. Articles 231 and 272 of this Act remain reserved.

2. The prescription does not begin or is suspended

a. during an objection, appeal, complaint, or revision procedure;

b. as long as the tax claim is secured or deferred;

c. as long as neither the taxpayers nor jointly liable persons have a tax residence or domicile in Switzerland.

3. The prescription begins anew with

a. any official act aimed at determining or asserting the tax claim that is communicated to the taxpayers or jointly liable persons;

b. any express acknowledgment of the tax claim by the taxpayers or jointly liable persons;

c. the submission of a request for remission;

d. the initiation of criminal prosecution for completed tax evasion or tax offense.

4. The right to levy a tax prescribes in any case 15 years after the end of the tax period.

1. Tax claims become time-barred five years after the assessments have become legally binding.

2. Suspension and interruption of the statute of limitations are governed by Article 187 paragraphs 2 and 3 of this law.

3. In any case, the statute of limitations expires ten years after the end of the year in which the taxes were definitively established.

1. The tax authorities, together with the taxpayers, ascertain the actual and legal circumstances relevant for a complete and accurate taxation.

2. They may, in particular, consult experts, conduct inspections, and examine business books and records on site. The resulting costs may be wholly or partially imposed on the taxpayers or any other person obligated to provide information who has rendered these costs necessary through a culpable breach of procedural obligations.

1. Tax records may be retained on paper or electronically.

2. The government council issues implementing provisions regarding the digitization and electronic retention of tax records and specifically regulates the conditions under which paper records may be destroyed after conversion to electronic form.

3. The digitization and electronic retention of tax records may be outsourced to third parties, provided that

a. the data protection law of the Canton of Obwalden remains applicable;

b. data processing takes place exclusively in Switzerland;

c. the storage and processing of the data occurs at all times on servers located in Switzerland;

d. the contractor guarantees in writing that data protection is ensured in accordance with cantonal regulations;

e. the contractor is a company based in Switzerland that is not foreign-controlled.

4. Tax records must be kept for at least 20 years after the end of the relevant tax period.

1. Taxpayers are called upon to submit their tax returns through a public notice and, insofar as the assessment authority is aware of the obligation to file a tax return, by delivering a notification to file the tax return.

2. The failure to deliver the notification does not exempt one from the tax obligation.

3. Tax returns must be completed truthfully and entirely by the taxpayers and submitted with the required attachments within the deadline to the competent authority.

4. If taxpayers fail to submit the tax return or the attachments within the deadline, or if they submit an inadequately completed form, they shall be reminded to remedy the omission within a reasonable period.

1. The tax return may be submitted in electronic form.

2. The assessment procedure is carried out in electronic form. The cantonal tax administration may deliver documents in electronic form to the taxable person with their consent.

3. Instead of a signature, an electronic confirmation of the information must be submitted for electronic filings. The government council shall determine how the requirement of writing is to be fulfilled in electronic communications.

4. The government council shall establish the details for the electronic procedure in implementing provisions. The authenticity and integrity of the transmitted data must be ensured.

1. The tax declaration may be submitted in paper form instead of electronic form.

2. The tax declaration in paper form can be obtained by the taxpayers from the tax administration.

3. The taxpayer must personally sign the tax declaration submitted in paper form.

1. The tax return of natural persons must include, in particular

a. Salary certificates for all income from dependent employment;

b. Certificates of remuneration received as a member of the management or another body of legal entities;

c. * Lists of all securities, receivables, and debts. These lists may also be submitted on data carriers provided or expressly recognized by the tax administration.

2. Natural persons with income from self-employment and legal entities must attach to the tax return

a. * The signed annual financial statements (balance sheets, profit and loss statements) of the tax period; or

b. * In cases of simplified accounting according to Article 957 paragraph 2 of the Swiss Code of Obligations (CO): Statements of income and expenditures, financial position, as well as personal withdrawals and deposits during the tax period.

3. The manner of maintaining and retaining the documents pursuant to paragraph 2 is governed by Articles 957 - 958f CO.

4. Furthermore, corporations and cooperatives must disclose their equity, which serves as their basis for profit tax assessment, at the end of the tax period or tax liability. This consists of paid-in capital stock or members' capital, open reserves, hidden reserves formed from taxed profits, and that part of the borrowed capital that is economically equivalent to equity.

1. Taxpayers must do everything necessary to enable a complete and accurate assessment.

2. They must, upon request from the assessment authority, provide information orally or in writing, present business books, receipts, and other certificates as well as documents pertaining to business transactions.

3. Natural persons with income from self-employment and legal entities must retain documents and receipts related to their activities for ten years.

1. The tax administration may require a taxable person with residence or domicile abroad to appoint a representative in Switzerland.

1. Third parties who are or were in a contractual relationship with taxpayers must certify the mutual contractual relationship and the reciprocal claims and services.

2. In particular, the following parties are obligated to issue written certificates to the taxpayers

a. Employers regarding their services to employees;

b. Creditors and debtors about the existence, amount, interest, and security of claims;

c. Insurers regarding the surrender value of insurance policies and the benefits paid or owed under the insurance contract; in the case of annuity insurance subject to the Insurance Act, they must additionally create a statement according to Art. 127 para. 1 let. c of the Federal Act on Direct Federal Taxation;

d. Trustees, asset managers, pledgees, agents, and other persons who possess or have possessed the assets of the taxpayers, regarding these assets and their income;

e. Persons who conduct or have conducted business with the taxpayers, regarding the reciprocal claims and services.

3. If taxpayers fail to submit the necessary certificates despite being reminded, the assessment authority may demand them from the third parties. The legally protected professional secrecy remains reserved.

1. Shareholders, co-owners, and joint owners are required, upon request, to provide the tax authorities with information regarding their legal relationships with the taxpayers, particularly concerning their shares, claims, and income.

1. The tax authorities must submit a certificate for each tax period

a. legal entities regarding the benefits provided to the members of the management and other bodies; foundations must additionally submit a certificate concerning the benefits provided to their beneficiaries;

b. occupational pension institutions and tied self-pension institutions regarding the benefits provided to the insured or beneficiaries;

c. simple partnerships and general partnerships concerning all matters that are significant for the assessment of the partners, particularly regarding their share in the income and assets of the partnership;

d. * collective investment schemes with direct real estate ownership regarding all matters relevant for the taxation of the direct real estate and its income;

e. * employers regarding all necessary information for the assessment of employee participations granted to their employees. The provisions issued by the Federal Council based on Article 129 paragraph 1 letter d of the Federal Act on Direct Federal Taxation[25] apply mutatis mutandis;

f. * unemployment funds regarding compensations paid to unemployed persons.

2. A duplicate of the certificate shall be sent to the taxpayers.

3. ...

1. The assessment authority reviews the tax return and conducts the necessary investigations.

2. It specifies the manner of information provision and the documents to be submitted, and sets a reasonable deadline for fulfilling these obligations.

1. Assessment According to Duty-Bound Discretion is Carried Out

a. when the taxpayers have not fulfilled their procedural obligations despite being reminded;

b. when the tax factors cannot be accurately determined due to a lack of reliable documentation.

2. For this assessment, particular consideration shall be given to empirical figures, asset development, and the cost of living of the taxpayers.

1. The assessment procedure is free of charge. However, taxpayers may be wholly or partially charged for the costs of audits or other evidence-gathering measures caused by their culpable conduct.

1. The civil registry offices shall immediately report each death, and the municipal offices shall report each opening of a will, including a copy of the will, to the cantonal tax administration as well as to the municipal authority responsible for the inventory in cases of death.

2-3

1. The certifying officers and land registry administrators are required to assist in the preparation and execution of the assessment.

2. Taxpayers must report any tax-triggering disposal that is not recorded in the land register to the cantonal tax administration in writing within 30 days.

1. In cases of disposals that do not require registration in the land register, taxpayers must provide the cantonal tax administration with the information necessary for the calculation of the tax within 30 days and, upon request, furnish the necessary documentation.

1. The church tax is levied on members of a denomination and on legal entities.

2. If the members of a family or a community of heirs belong to different denominations, the tax claim is divided proportionally to the number of denomination members to the total number of family members.

3. The tax revenue of a municipality is divided among the recognized church congregations in proportion to the denomination members. Legal entities with a denominational purpose can only be taxed by the church congregation of their denomination.

1. The assessment authority determines the tax factors in the assessment notice.

2. All deviations from the tax return must be specified and justified in detail upon issuance of the assessment notice.

3. The assessment becomes legally binding if no objection is raised within the statutory period.

1. Taxpayers may file a written objection against assessment decisions with the assessment authority within 30 days of notification.

2. Taxpayers may only contest assessments made on discretionary judgment grounds due to manifest inaccuracy.

3. Objections must include a request with reasoning and any potential evidence, such as supporting documents.

1. In the objection procedure, the assessment authorities have the same powers as they do in the assessment procedure.

2. A withdrawal of the objection will not be accepted if, under the circumstances, it is assumed that the assessment was incorrect.

3. ...

1. The assessment authority decides on the objection based on the investigation. It may reassess all tax factors and, after hearing the taxpayers, may also amend the assessment to their disadvantage.

2. The decision must be substantiated and delivered to the taxpayers along with instructions on legal remedies.

3. The objection procedure is free of charge. Article 189 paragraph 2 of this law is reserved.

1. Debtors of taxable services are obligated to take all necessary measures for correct tax collection, especially

a. to determine the obligation to withhold tax and the applicable rate before the payout of taxable services;

b. * to withhold the owed withholding tax upon the maturity of monetary services, regardless of any objections or wage garnishments, and to demand the owed tax from the taxpayers for other services, such as benefits in kind and gratuities;

c. * to deduct withholding tax even if employees are residents or domiciled in another canton;

d. to periodically settle accounts with the cantonal tax administration regarding individuals subject to withholding tax and to remit the withholding taxes within the deadline;

e. * to issue to employees a statement or a certificate regarding the amount of withholding tax deduction and a wage statement;

f. * to annually report to the cantonal tax administration, without being asked, employees subject to subsequent assessment according to Art. 116 of this law;

g. * to pay the proportional taxes on employee stock options exercised abroad; the employer is liable for the proportional tax even if the monetary benefit is granted by a foreign group company.

2. For the control of tax collection, debtors of taxable services must grant the cantonal tax administration access to all relevant documents and provide information orally or in writing upon request.

3. Debtors of taxable services are liable for the payment of withholding tax. Organizers responsible for the arrangement of performances by artists, athletes, or speakers in Switzerland are jointly liable for the payment of withholding tax.

4. Debtors of taxable services receive a collection commission.

5. The Cantonal Council regulates the amount of the collection commission and the accounting deadlines by ordinance. For capital benefits, the collection commission is 1 percent of the entire withholding tax amount, but not exceeding 50 francs per capital benefit for federal, cantonal, and municipal withholding tax.

1. The tax administration may require a taxable person with residence or domicile abroad to designate a representative in Switzerland.

2. Persons who request a subsequent ordinary assessment pursuant to Art. 120a of this law must submit the necessary documents and designate a delivery address in Switzerland. If no delivery address is designated or if the delivery address becomes invalid during the assessment procedure, the competent authority shall grant the taxable person an appropriate deadline to designate a valid delivery address. If this deadline expires without result, the withholding tax will replace the taxes to be assessed under the ordinary procedure on the earned income. Art. 54 para. 2 of the Implementation Ordinance to the Tax Law shall apply mutatis mutandis.

1. The taxpayers are obliged to provide the cantonal tax administration as well as the debtors of the taxable service with information, either orally or in writing, regarding the circumstances relevant to the collection of withholding taxes.

1. Taxpayers may be required by the cantonal tax administration to pay the arrears of withholding taxes they owe if the taxable benefits have not been, or have not fully been, paid after deduction of the withholding tax, and if it is not possible to recover the arrears from the debtors of the taxable benefits.

1. If the individuals subject to withholding tax are not liable to tax in the canton, the cantonal tax administration transfers the collected tax amounts to the tax authority of the canton entitled to taxation.

2. The withholding tax deduction must be made according to the law of the canton in which the employee has their tax domicile or residence at the time the taxable service is due.

3. The debtor of the taxable service transfers the withholding tax to the canton responsible according to paragraph 2.

1. Taxpayers with out-of-canton debtors of the taxable service are subject to withholding tax according to this law.

2. The withholding taxes deducted by out-of-canton debtors are to be calculated and accounted for according to this law.

1. At the end of the calendar year, the cantonal tax administration prepares a settlement for the Confederation, canton, and municipalities and determines the share for the eligible municipalities according to the following guidelines

a. From the gross amount of the withholding tax revenues received during the settlement year, the direct federal taxes are deducted in advance;

b. * ...

c. Based on the net withholding tax revenue after deducting the fire service replacement levy, the municipal governments allocate the shares to the eligible municipalities according to the respective valid tax rate;

d. The withholding tax revenues to which the eligible municipalities are entitled are credited to them.

1. The taxable person may request a ruling from the tax administration regarding the existence and extent of the tax liability by March 31 of the tax year following the due date of the service, if they

a. * disagree with the withholding tax deduction according to the certificate under Article 209 of this law; or

b. * have not received the certificate under Article 209 of this law from the employer.

2. The debtor of the taxable service may request a ruling from the tax administration regarding the existence and extent of the tax liability by March 31 of the tax year following the due date of the service.

3. They remain obligated to collect the withholding tax until a legally binding decision is reached.

1. If the debtors of taxable services have not made or have insufficiently made the tax deduction, the cantonal tax administration obliges them to pay the arrears. The recourse of the debtors against the taxpayers remains reserved.

2. If debtors of taxable services have made an excessive tax deduction, they must reimburse the taxpayers for the difference. The cantonal tax administration can also directly refund to the taxpayers the withholding taxes that were excessively deducted and accounted for.

3. The taxable person can be obliged by the assessment authority to pay the arrears of the withholding tax they owe if the paid-out taxable service was not or not fully reduced by the withholding tax and a subsequent collection from the debtor of the taxable service is not possible.

4. Whoever is criminally responsible under Article 290 of this law is personally liable for deducted but not remitted withholding taxes, including fines and interest. The financial administration asserts the claim by means of a decision. The claim expires one year after the conclusion of the criminal proceedings.

1. Taxpayers or debtors of taxable benefits may file an objection against a decision regarding the withholding tax in accordance with Article 206 of this Act.

1. Taxpayers may file an appeal in writing with the Cantonal Tax Appeal Commission against objection decisions within 30 days of their delivery.

2. Taxpayers or debtors of taxable benefits may file an appeal against objection decisions regarding withholding tax.

3. The appeal may address all deficiencies of the contested decision as well as the preceding procedure.

4. The appeal letter must contain a request and a justification. If it does not meet these requirements, appellants will be granted a short, non-extendable additional period to rectify the deficiency, with the warning that failure to do so will result in the appeal not being considered. Evidence should be attached to the appeal letter or, if this is not possible, precisely specified.

5. Decisions of the President of the Tax Appeal Commission under Art. 174 para. 2 of this law may be further appealed to the Tax Appeal Commission within 30 days.

1. The appeal document shall be served to the opposing party for response, unless the appeal is obviously inadmissible. A copy of the appeal response shall be sent to the appellants.

2. Exceptionally, an additional exchange of written submissions or an oral hearing may be ordered.

3. The cantonal tax appeal commission has the same powers as the tax authorities in the assessment procedure.

1. The cantonal Tax Appeals Commission is not bound by the parties' requests in its decision. It may, after hearing the taxpayer, amend the assessment to the taxpayer's detriment. The procedure shall continue despite the withdrawal or acknowledgment of the appeal, provided there are indications that the contested decision or the concurring requests contravene the law or if an opposing party has submitted a divergent request.

2. In exceptional cases, the cantonal Tax Appeals Commission may remand the case to the lower authority for reassessment, particularly if no substantive decision has been made unjustly, if there is a serious procedural defect, or if the facts of the case have been inadequately established.

1. The decision shall be communicated to the parties in writing. It includes the composition of the cantonal tax appeal commission, a statement of reasons, the operative part, and information on legal remedies. A copy of the decision shall be sent to the cantonal tax administration.

1. The costs of the proceedings before the cantonal tax appeal commission shall be imposed on the losing party; if the appeal is partially upheld, the costs shall be apportioned accordingly.

2. The successful appellants may be charged with all or part of the costs if they could have obtained their rights during the assessment or objection procedure through proper conduct, or if they have hindered the investigation of the cantonal tax appeal commission through dilatory behavior.

3. If special circumstances justify it, the imposition of costs may be waived.

1. The Administrative Procedure Ordinance is applicable for the awarding of party compensation.

1. Taxpayers or the cantonal tax administration may appeal the decision of the cantonal tax appeals commission to the administrative court within 30 days of its notification.

2. Against the decision of the cantonal tax appeals commission concerning withholding tax, taxpayers, payers of taxable income, or the cantonal tax administration may file an appeal with the administrative court within 30 days of its notification.

3. Otherwise, the appeal proceedings before the administrative court are governed by the Law on Judicial Organization and the Ordinance on Administrative Court Procedures.

1. Against the decision of the Administrative Court, the affected persons, the cantonal tax administration, or the Federal Tax Administration may file an appeal with the Federal Court in accordance with the Federal Supreme Court Act and the Federal Act on the Harmonization of Direct Taxes of the Cantons and Municipalities.

1. Final decisions can be revised in favor of taxpayers upon request or ex officio if

a. significant new facts or decisive new evidence are discovered;

b. the adjudicating authority has disregarded significant facts or decisive evidence known to it or which it should have known, or has otherwise violated essential procedural principles;

c. a crime or offense has influenced the decision;

d. * in cases of inter-cantonal or international double taxation conflicts, the adjudicating authority concludes that under the applicable rules for the avoidance of double taxation, the Canton of Obwalden must limit its taxation rights.

2. Revision is excluded if the applicants present as grounds for revision what they could have claimed in the ordinary proceedings with due diligence.

1. The request for revision must be submitted within 90 days of the discovery of the grounds for revision, but at the latest within ten years of the announcement of the decision.

1. The appeal for revision must be submitted in writing to the authority that made the previous decision.

2. The appeal for revision must include

a. the precise designation of the individual grounds for revision;

b. a petition indicating to what extent the previous decision should be revoked and how the new decision should be rendered.

3. The evidence for the grounds for revision as well as for the claim that less than 90 days have passed since the discovery of the grounds for revision must be attached to the appeal for revision or, if this is not possible, precisely designated.

1. The request for revision shall be submitted to the parties for their opinion, provided that it is not evidently unfounded.

2. If there is a ground for revision, the authority shall rescind its previous decision and render a new decision.

3. The same legal remedies available against the previous decision may be pursued against the dismissal of the request for revision and against the new decision.

4. Otherwise, the provisions governing the procedure in which the previous decision was issued are applicable.

1. Errors in calculation and clerical mistakes in legally binding decisions may be corrected upon request or ex officio by the authority that made them, within five years of their notification.

2. The same legal remedies as against the original decision are available against the correction or the refusal of the correction.

1. If it emerges based on facts or evidence that were not known to the tax authority, that an assessment was unjustly omitted or a legally binding assessment is incomplete, or if an omitted or incomplete assessment is attributable to a crime or an offense against the tax authority, the uncollected tax along with interest shall be claimed as supplementary tax.

2. If the taxpayers have completely and accurately declared their income, assets, net profit, equity, or property gain in their tax return and the tax authorities have recognized the assessment, no supplementary tax can be levied, even if the assessment was inadequate.

1. The right to initiate a supplementary tax procedure expires ten years after the end of the tax period for which an assessment was wrongfully omitted or a legally valid assessment is incomplete.

2. The initiation of criminal prosecution for tax evasion or tax offense shall also be deemed as the initiation of the supplementary tax procedure.

3. The right to assess the supplementary tax expires 15 years after the end of the tax period to which it relates.

1. The supplementary tax procedure is conducted by the cantonal tax administration.

2. If at the commencement of the procedure, a criminal proceeding for tax evasion is neither initiated nor pending, nor can it be excluded from the outset, the taxpayer is informed of the possibility of later initiation of such criminal proceedings.

3. The initiation of the supplementary tax procedure must be communicated in writing to the affected taxpayers, including the reason for the initiation.

4. The procedure, which has neither been initiated nor concluded at the time of the taxpayer's death, is initiated or continued with respect to the heirs.

5. In other respects, the provisions concerning general procedural principles and the ordinary assessment and appeal procedure are applicable mutatis mutandis.

1. All heirs are independently entitled to a simplified additional taxation of the assets and income components concealed by the deceased, provided that

a. the concealment is not known to any tax authority;

b. they unreservedly assist the administration in determining the concealed assets and income elements; and

c. they make a serious effort to pay the owed additional taxes.

2. The additional taxes are calculated for the last three tax periods preceding the year of death according to the regulations for ordinary assessment and are reclaimed along with interest on arrears.

3. The simplified additional taxation is excluded if the estate is officially or bankruptcy-liquidated.

4. The executor or estate administrator may also apply for a simplified additional taxation.

1. Upon the death of the taxpayer, an official inventory shall be taken within 30 days.

2. The inventory may be omitted if it is assumed that no assets are present.

3. If an inventory has been prepared pursuant to Art. 154 et seq. of the Federal Act on Direct Federal Taxation, it shall also apply to cantonal taxes.

1. The inventory shall include the assets existing on the day of the decedent's death, those of their spouse living in an undivided marriage, and the minor children under their parental care for whom they can claim a child deduction according to Art. 37 para. 1 letter b of this law.

2. Facts that are relevant for tax assessment shall be determined and recorded in the inventory.

1. The heirs and the persons who manage or hold the estate assets may only dispose of these assets before the inventory is taken with the consent of the inventory authority.

2. To secure the inventory, the inventory authority may carry out an immediate sealing.

1. The heirs, the legal representatives of heirs, the estate administrators, and the executors of the will are obliged to

a. provide truthful information on all matters that may be important for determining the tax factors of the deceased;

b. present all books, documents, certificates, and records that can provide information about the estate;

c. open all premises and containers that were available to the deceased.

2. Heirs and legal representatives of heirs who lived in a domestic community with the deceased or who stored or managed the assets of the deceased, must also grant access to their rooms and containers.

3. If heirs, legal representatives of heirs, estate administrators, or executors of the will become aware of items of the estate that are not listed in the inventory after the inventory has been recorded, they must report these to the inventory authority within ten days.

4. At least one legally competent heir and the legal representatives of minor heirs or heirs under comprehensive guardianship must be present during the inventory taking.

1. Third parties who held or managed the assets of the decedent, or to whom the decedent had financial rights or claims, are obligated to provide the heirs, at the request of the inventory authority, with all related information in writing.

2. If there are significant reasons that hinder the fulfillment of this duty to provide information, third parties may directly provide the requested information to the inventory authority.

3. Furthermore, Articles 194 and 195 of this Act apply mutatis mutandis.

1. An official copy of the inventory shall be delivered to the executors or representatives designated by the heirs and the cantonal tax office.

1. The inventory recording and sealing are the responsibility of the municipality where the deceased had their last tax residence or domicile, or possessed taxable assets. The municipal council may delegate the inventory recording to the cantonal tax administration.

2. If the child and adult protection authority or the judge orders an inventory recording, a copy of the inventory will be delivered to the inventory authority. This authority can adopt or, if necessary, supplement it.

3. In the event of a death, the civil registry offices promptly inform the authority responsible for the inventory recording.

1. Applications for tax exemption must be submitted to the cantonal tax administration.

1. The decision regarding tax exemption rests with the cantonal tax authority.

1. Applicants may file an appeal against the decision of the cantonal tax administration with the cantonal tax appeals commission and may lodge a complaint against the decision of the cantonal tax appeals commission with the administrative court.

2. The provisions regarding the appeal and complaint procedures for assessments apply mutatis mutandis.

1. The taxes pursuant to Article 1 of this law are collected by the cantonal financial administration.

2. The canton is responsible to the entitled municipalities for the correct collection and timely delivery of the taxes and is liable for the actions and omissions of the competent administrative employees.

**1. Generally Due:**

a. *Periodically assessed income, wealth, expenditure, profit, and capital taxes become due at a time determined by the Cantonal Council through a decree;*

b. *...*

c. *Taxes not assessed periodically become due upon the delivery of the provisional invoice.*

**2. Nevertheless, taxes and fines imposed for violations become due no later than:**

a. On the day taxpayers evidently intend to permanently leave the canton;

b. Upon the application for deregistration of a legal entity in the commercial register;

c. At the time when foreign taxpayers cease their business operations, their stakes in a business operation, their permanent establishment, their real estate, or their claims secured by real estate;

d. Upon the opening of bankruptcy proceedings;

e. Upon death.

**3. Taxes and fines imposed for violations become fully due even when they are demanded based on a provisional tax invoice alone, or if an objection, appeal, or complaint has been lodged against the assessment.**

1. Taxes for natural persons become due in the tax year, while taxes for legal entities become due in the calendar year in which the tax period (the fiscal year) ends.

1. If the assessment is not completed at the time the tax is due, the tax will be collected provisionally. The basis for this is the tax return, the last assessment, or the estimated amount owed.

2. Provisionally collected taxes will be credited against the taxes owed as per the definitive assessment.

3. Amounts paid insufficiently or in excess will be demanded, offset, or refunded.

4. An objection can be raised against the provisional tax assessment, and an appeal can be made against the objection decision. The deadline for legal remedies is 30 days.

5. Only the tax sovereignty can be contested or it can be credibly demonstrated that the estimated tax amount for the tax period is lower than the invoiced provisional tax. Otherwise, the provisions regarding the objection and appeals procedure apply accordingly.

1. The final assessment is delivered to the taxpayers after the final determination or upon opening the definitive assessment.

2. With the final assessment, compensatory interest is calculated for periodic taxes

a. in favor of the taxpayers on all payments made by them based on provisional assessments until the final assessment;

b. against the taxpayers on the definitively assessed tax amount from the due date.

3. No compensatory interest is calculated for non-periodic taxes.

**1. Taxes and fines billed with the final invoice must be paid within 30 days.**

2. Upon the expiration of the payment deadline as per paragraph 1, interest on arrears is due regardless of any potential objection, appeal, or complaint procedure. For supplementary taxes, the interest on arrears is calculated from the due date in accordance with Art. 244 para. 1 letter a and Art. 247 para. 3 of this law, instead of the compensatory interest pursuant to Art. 247 para. 2 of this law.

3. The cantonal council regulates the rate of the compensatory interest pursuant to Art. 247 para. 2 of this law and the interest on arrears according to paragraph 2 by ordinance.

1. Delinquent taxpayers are to be reminded upon the expiration of the payment deadline.

2. If the owed amount is not paid even after a reminder, enforcement proceedings are to be initiated.

3. If the liable parties have no residence in Switzerland or if an attachment has been filed, enforcement proceedings may be initiated without prior reminder.

4. The legally binding final assessments and provisional assessments and decisions of the authorities charged with the execution of this law are equivalent to enforceable court judgments within the meaning of Art. 80 of the Federal Act on Debt Collection and Bankruptcy.

1. If paying the tax, costs, or a fine for an infringement within the prescribed period constitutes a significant hardship for the liable parties, the collection agency designated by the competent authority may extend the payment deadline or allow installment payments.

2. The granting of payment facilitations may be made contingent upon the provision of appropriate security.

3. Granted payment facilitations are to be revoked if their prerequisites cease to exist or if the conditions upon which they are based are not fulfilled.

1. Taxes collected at the source are due at the time of payment, transfer, credit, or offset of the taxable performance.

2. Taxes must be transferred by the debtors of the taxable performance to the cantonal tax administration within 45 days after the due date. The tax administration may specify special delivery dates.

3. Interest on arrears will be charged for taxes paid late; interest begins to accrue 45 days after the delivery date.

4. The provisions of the tax law regarding tax collection apply mutatis mutandis.

1. Taxable natural and legal persons for whom the payment of taxes, interest, or fines due to a transgression would constitute undue hardship as a result of an emergency situation, may be granted a full or partial waiver of the amounts owed.

2. An emergency situation is deemed to exist when the total amount owed is disproportionate to the financial capacity of the taxable person. For natural persons, a disproportion is particularly present if the tax debt cannot be fully settled within a foreseeable period despite reducing living costs to the existential minimum according to debt enforcement law.

3. A waiver is excluded if

a. the tax, interest, or fine has not yet been definitively assessed;

b. the taxable person is over-indebted;

c. the tax, interest, or fine has been paid unconditionally;

d. enforcement proceedings have been initiated for outstanding tax amounts.

4. An application for a waiver will not be considered if the applicant fails to fulfill their procedural obligations despite being prompted.

5. If over-indebtedness as per paragraph 3, letter b, exists, a tax waiver may be granted as part of a comprehensive debt restructuring to the extent that the remaining creditors relinquish their claims.

6. The existence of assets does not preclude a tax waiver.

1. The decision on tax remission is made by the cantonal finance administration.

2. The decision must be communicated in writing to the taxpayers and the municipal council.

1. The taxpayers may file an appeal against the decision of the cantonal financial administration with the cantonal tax appeal commission within 30 days of delivery.

2. The appeal must contain a petition and a justification. The evidence should be attached to the appeal or, if this is not possible, precisely identified. The provisions regarding the appeal procedure in assessments apply mutatis mutandis.

3. The decision of the cantonal tax appeal commission can be contested in accordance with Articles 224 and 224a of this Act.

1. An appeal against the decision of the cantonal financial administration can be lodged by the municipal council within 30 days of notification, with the cantonal tax appeal commission, if the imposed taxes exceed the amount of CHF 1,000.

2. The appeal must include a request and a justification. It must be delivered to the taxpayers for response and to the cantonal financial administration for consultation. The provisions governing the appeal procedure for assessments apply accordingly.

3. The decision of the cantonal tax appeal commission can be contested according to Articles 224 and 224a of this law.

1. Taxpayers can reclaim a paid tax amount if they have paid a tax or fine for a violation that is not owed in whole or in part. Taxes and fines that have been definitively assessed are considered owed.

2. If the sale of real estate does not result in a definitive entry in the land register or is nullified for legal reasons, a previously paid land transfer tax will be refunded.

3. Refundable amounts will accrue interest at the rate set for compensatory interest under Article 248, paragraph 3 of this law, from the time of payment if more than 30 days have passed since the payment.

4. The claim for a refund must be asserted with the authority responsible for collection within five years after the end of the calendar year in which the payment was made. If this authority rejects the refund claim, the affected parties have the same legal remedies available as against an assessment decision. The claim expires ten years after the end of the payment year.

1. If taxpayers do not have a domicile in Switzerland or if the tax owed, along with interest and costs, appears to be at risk under the circumstances, the administrative office responsible for collection or the cantonal tax administration may demand security at any time before the final determination of the tax amount. The security order is issued to the taxpayers in writing; it must specify the amount to be secured and is immediately enforceable. It is equivalent to a judicial judgment within the meaning of Art. 80 of the Federal Act on Debt Collection and Bankruptcy.

2. The security must be provided in cash, by depositing secure and marketable securities, a bank surety, or a bank guarantee.

1. Taxpayers may file an appeal with the Cantonal Tax Appeals Commission against the provisional measure within 30 days of its notification.

2. The appeal must contain a request and a statement of grounds; evidence must be attached or, where this is not possible, precisely identified. The provisions concerning the appeals procedure for assessments apply mutatis mutandis.

3. The decision of the Cantonal Tax Appeals Commission can be challenged pursuant to Articles 224 and 224a of this law.

4. The appeal does not suspend the provisional measure.

1. The order for securing assets is considered an attachment order pursuant to Article 274 of the Federal Act on Debt Collection and Bankruptcy. The attachment is executed by the competent debt enforcement office.

2. An objection to the attachment order under Article 278 of the Federal Act on Debt Collection and Bankruptcy is not permissible.

1. Legal entities and branches of foreign enterprises may only be removed from the commercial register with the consent of the cantonal tax administration.

2. Consent is granted if all taxes are paid or secured.

1. For all tax claims directly related to the encumbered property (property profit, property transfer, income, and profit taxes), the canton and the tax-eligible municipalities are granted a statutory lien on the relevant properties, which takes precedence over private law liens registered in the land register. This statutory lien does not require registration to come into existence; it can also be entered in the land register without a final assessment order.

2. ...

1. Any person who fails to fulfill an obligation imposed on them by the provisions of this Act or by an order made pursuant to this Act, despite a reminder, whether intentionally or negligently, in particular

a. does not submit the tax return or the required attachments;

b. fails to fulfill a duty to provide information, certification, or notification;

c. violates obligations incumbent on them as heirs or third parties in the inventory procedure, shall be subject to a fine.

2. The fine amounts to up to CHF 1,000; in serious cases or in cases of recurrence, up to CHF 10,000.

**1. Fines shall be imposed on anyone who:**

a. as a taxable person, intentionally or negligently causes an assessment to be omitted unjustly or causes a finalized assessment to be incomplete;

b. is obligated to withhold taxes at the source and intentionally or negligently fails to withhold taxes, or withholds taxes incompletely;

c. intentionally or negligently obtains an unlawful refund or an unjustified dismissal.

**2. The fine generally amounts to the equivalent of the evaded tax. It can be reduced to one-third in cases of slight negligence, or increased to triple in cases of serious negligence.**

**3. If a taxable person voluntarily reports a tax evasion for the first time, prosecution will be waived (voluntary disclosure without penalty), if:**

a. the evasion is not known to any tax authority;

b. they fully assist the administration in determining the back taxes; and

c. they make a sincere effort to pay the owed back taxes.

**4. For any subsequent voluntary disclosure, the fine will be reduced to one-fifth of the evaded tax under the conditions described in paragraph 3.**

1. Anyone who attempts to evade taxes shall be punished with a fine.

2. The fine amounts to two-thirds of the fine that would be imposed for a completed tax evasion.

1. Any person who intentionally instigates, assists in, or, as a representative of taxpayers, causes or participates in tax evasion shall be fined regardless of the criminal liability of the taxpayers and shall, furthermore, be jointly and severally liable for the back taxes up to the amount of the evaded tax.

2. The fine may amount to up to CHF 10,000, and in severe cases or in the event of a repeat offense, up to CHF 50,000.

3. If a person under paragraph 1 voluntarily discloses themselves for the first time and the conditions under Article 264 paragraph 3 letters a and b of this law are met, prosecution shall be waived and joint and several liability shall no longer apply.

1. Whoever conceals or removes estate assets that they are obligated to disclose in the inventory process, with the intent to withhold them from the inventory, or whoever incites or aids such an action, shall be punished with a fine.

2. The fine shall amount to up to CHF 10,000, in serious cases or in the event of a repeat offense, up to CHF 50,000.

3. The attempt to conceal or remove estate assets is also punishable.

4. If a person voluntarily reports themselves for the first time under paragraph 1, there will be no prosecution for concealing or removing estate assets in the inventory process and for any other offenses committed in this context (self-report without penalty), provided that

a. the violation is not known to any tax authority; and

b. the person unconditionally assists the administration in correcting the inventory.

1. The taxable person who is living in a legally and factually undivided marriage is only penalized for the evasion of their own tax factors. Article 266 of this law remains reserved. The joint signing of the tax return and electronic submission do not, by themselves alone, constitute a violation pursuant to Article 266.

### 1. If procedural obligations are violated, taxes are evaded, or attempts are made to evade taxes on behalf of a legal entity, the legal entity shall be punished.

2. If within the business operations of a legal entity acts of participation, such as incitement, aiding and abetting, or collaboration in the tax evasion of third parties are committed, Article 266 of this law shall apply to the legal entity.

3. The punishment of the acting bodies as well as the representatives pursuant to Article 266 of this law remains reserved.

4. For corporations and institutions under foreign law and for foreign associations of individuals without legal personality, paragraphs 1 to 3 shall apply mutatis mutandis.

1. If a taxable legal entity voluntarily discloses for the first time a tax evasion committed within its business operations, prosecution is waived (penalty-free voluntary disclosure) if

a. the evasion is not known to any tax authority;

b. it unconditionally supports the administration in the assessment of the back taxes; and

c. it makes a serious effort to pay the owed back taxes.

2. Penalty-free voluntary disclosure can also be submitted

a. after a change of company name or relocation of the registered office within Switzerland;

b. following a transformation under Articles 53 to 68 of the Merger Act (FusG) of October 3, 2003, by the new legal entity for tax evasions committed before the transformation;

c. following an absorption (Art. 3 para. 1 lit. a FusG) or a demerger (Art. 29 lit. b FusG) by the surviving legal entity for tax evasions committed before the absorption or demerger.

3. The penalty-free voluntary disclosure must be submitted by the bodies or representatives of the legal entity. No prosecution is pursued against these bodies or representatives, and their joint liability ceases.

4. If a former member of a governing body or a former representative of the legal entity makes the first disclosure of this tax evasion and the tax evasion is not known to any tax authority, prosecution of the legal entity, all current and former members of the governing bodies, and all current and former representatives is waived. Their joint liability ceases.

5. For each further voluntary disclosure, the fine under the conditions of paragraph 1 is reduced to one-fifth of the evaded tax.

6. After a legal entity has ceased its tax liability in Switzerland, no further voluntary disclosures can be submitted.

1. Fines and costs imposed in the tax proceedings are collected in accordance with Articles 243 to 250 of this law.

2. The Canton and the Municipality each have a half share in the fines.

1. Prosecution Becomes Time-Barred

a. In cases of violation of procedural obligations, three years, and in cases of attempted tax evasion, six years after the final and binding conclusion of the procedure in which the procedural obligations were violated or the attempted tax evasion was committed;

b. In cases of completed tax evasion, ten years after the end of the tax period for which the taxable person was not or incompletely assessed, or the withholding tax was not lawfully conducted, or ten years after the end of the calendar year in which an unlawful refund or unjustified remission was obtained, or assets were concealed or misappropriated in inventory proceedings.

2. The limitation period ceases to apply if the cantonal tax administration issues a ruling in accordance with Article 280 of this law before the limitation period expires.

1. The cantonal tax administration assesses the infractions related to the violation of procedural duties and tax evasion in accordance with Articles 263 to 270 of this law.

1. The initiation of criminal proceedings for tax evasion shall be communicated in writing to the affected person. The person shall be given the opportunity to respond to the accusation made against them; they shall be informed of their right to refuse to give a statement and to cooperate.

2. Evidence obtained from a supplementary tax procedure may only be used in criminal proceedings for tax evasion if it was neither obtained under the threat of an assessment based on discretionary judgment (Art. 197 of this law) with reversal of the burden of proof according to Art. 206 para. 2, nor under the threat of a fine for violation of procedural obligations.

3. In the event of a violation of procedural obligations, a penal order may be issued directly.

1. Defendants may involve a defense attorney at any time.

2. If the subject matter of the criminal proceedings is not a minor case and presents significant difficulties of a factual or legal nature which the defendants are unable to overcome, an official defense attorney will be appointed for them upon their request, provided they do not have the means to pay for a defense.

3. The request for the appointment of an official defense attorney shall be decided by the head of the finance department until a possible request for judicial assessment is received; thereafter, the cantonal tax appeals commission has jurisdiction.

1. If the defendants are unable to follow the criminal proceedings for tax evasion because they do not understand the German language, an interpreter shall be engaged as necessary.

1. Minutes shall be kept of all significant negotiations and orders, providing information on the content, location, and time of the actions, as well as the names of the persons present.

1. The competent authority shall establish the facts of the case. It may question the accused, interview witnesses, and conduct further investigations if necessary.

2. The accused may inspect the files as soon as it can be done without jeopardizing the purpose of the investigation. Otherwise, the provisions applicable to the regular assessment procedure concerning the procedural rights of taxpayers and the obligations of third parties and authorities to cooperate shall apply mutatis mutandis.

1. Witnesses are examined under the analogous application of the Code of Civil Procedure. Bank secrecy is reserved.

2. If witnesses unjustifiably refuse to testify, they shall be punished for violating procedural obligations. If they persist in their refusal, they will be referred to the criminal judge for punishment for disobedience pursuant to Art. 291 of this law.

3. The accused are entitled to ask the witnesses additional questions.

1. Upon completion of the investigation, the cantonal tax administration issues a decision, which it communicates in writing to the person concerned.

1. The penal order is issued in writing and specifies: the accused, the act, the applicable legal provisions, the punishment, the costs, and the indication of the right to judicial review.

2. The penal order is accompanied by a brief rationale, including a reference to the relevant evidence.

3. The costs of special investigative measures, such as accounting audits, expert reports, expert witnesses, are generally imposed on those punished for evasion; they may also be imposed on them upon the termination of the investigation if they have caused the prosecution through culpable behavior or significantly hindered or delayed the investigation.

1. The accused may, within 30 days from the delivery of the penalty order, request in writing an assessment by the cantonal tax appeals commission from the cantonal tax administration.

2. The request for judicial assessment may be withdrawn until the court renders its judgment.

3. If a request for judicial assessment is not made within the deadline or is withdrawn, the penalty order shall be equivalent to a legally binding judgment.

4. An appeal against the dismissal order can be lodged with the cantonal tax appeals commission. The provisions regarding the appeals procedure for assessments apply mutatis mutandis.

1. The request for judicial review is to be forwarded to the Cantonal Tax Appeals Commission without delay along with the records.

2. The penal order is considered an indictment.

1. The Cantonal Tax Appeals Commission informs the parties about the receipt of the request for judicial review. It examines whether this request has been submitted in a timely manner.

2. If further investigations are necessary to clarify the facts of the case, the Cantonal Tax Appeals Commission may, upon request of a party or on its own initiative, conduct or have conducted additional inquiries.

3. The parties will be notified in due time about the main hearing.

1. The hearing is oral and public. To protect essential public or private interests, the cantonal Tax Appeal Commission may, on its own initiative or at the request of a party, exclude the public from the proceedings entirely or partially.

2. The cantonal Tax Appeal Commission freely evaluates the evidence. It is not bound by a decision regarding back taxes.

3. The judgment pronouncement is public.

1. The accused must personally appear before the cantonal tax appeal commission. The chairperson may waive the requirement for personal appearance for important reasons.

2. If the accused fail to attend the hearing without having been granted a waiver for personal appearance, it will be assumed that they have withdrawn their request for judicial review.

3. If the accused were unable to participate in the main hearing through no fault of their own, they may resubmit their request for judicial review to the cantonal tax appeal commission within five days of the obstacle ceasing to exist.

1. To the extent that the foregoing provisions do not provide otherwise, the provisions concerning the appeal procedure for assessments shall apply mutatis mutandis.

1. An appeal against the decision of the Cantonal Tax Appeal Commission can be lodged with the Administrative Court by the convicted parties and the Cantonal Tax Administration.

1. Against the decision of the Administrative Court, the affected person, the cantonal tax administration, or the Federal Tax Administration may file an appeal with the Federal Supreme Court in accordance with the Federal Supreme Court Act.

1. Anyone who, for the purpose of tax evasion, uses forged, falsified, or factually incorrect documents such as business records, balance sheets, profit and loss statements, or wage statements and other third-party attestations to deceive shall be punished with imprisonment for up to three years or a monetary fine. A suspended sentence may be combined with a fine of up to CHF 10,000.

2. The punishment for tax evasion remains reserved.

3. If a voluntary disclosure in accordance with Art. 264 paragraph 3 or Art. 270a paragraph 1 of this Act is made, prosecution for all other offenses committed for the purpose of this tax evasion shall be waived. This provision also applies in cases under Art. 266 paragraph 3 and Art. 270a paragraphs 3 and 4 of this Act.

1. Any person who is obligated to withhold taxes at the source and uses the withheld taxes for their own benefit or the benefit of another shall be punished by imprisonment or a fine. A conditional sentence may be combined with a fine of up to CHF 10,000.

2. If withholding taxes are embezzled within the business operations of a legal entity, a partnership, or a public law corporation or institution, paragraph 1 applies to the individuals who have acted or should have acted on their behalf.

3. If a voluntary disclosure is made pursuant to Article 264 paragraph 3 or Article 270a paragraph 1 of this law, prosecution for the embezzlement of withholding taxes and other offenses committed for the purpose of embezzlement of withholding taxes shall be waived. This provision is also applicable in cases pursuant to Article 266 paragraph 3 and Article 270a paragraphs 3 and 4 of this law.

1. The general provisions of the Swiss Criminal Code are applicable insofar as the Tax Law does not prescribe otherwise.

2. The criminal procedure and enforcement are governed by cantonal law, insofar as federal law does not determine otherwise.

3. Decisions of the last cantonal instance are subject to an appeal for nullity to the Federal Supreme Court.

1. Prosecution of tax offenses becomes time-barred after 15 years from the date the offenders committed the last criminal act.

2. The statute of limitations ceases to apply if a first-instance judgment is rendered before the expiration of the limitation period.

1. The Cantonal Council is authorized to grant tax amnesty in the sense that prosecution for tax evasion is waived for those who, within the prescribed period, declare previously undisclosed taxable assets for taxation. The deadline is set by public announcement at the beginning of each tax period.

2. This benefit does not apply to those taxable factors for which supplementary tax proceedings have been initiated against the taxpayers.

1. The Cantonal Council shall issue the necessary implementing regulations and transitional provisions by ordinance.

1. Amendments or the termination of the Concordat on the Exclusion of Tax Agreements dated December 10, 1948, require the approval of the Cantonal Council.

1. The Tax Law of October 21, 1979 is repealed. The following provisions remain reserved.

1. The new law is applicable for the first time to the tax period beginning on January 1, 1995. Assessments up to and including the tax year 1994 will be conducted under the old law.

2. The evaluation of cases involving additional and penal taxes related to tax years up to and including 1994 will be conducted under the old law, unless the new law provides a more favorable solution for the taxpayers. However, the procedure is governed by the new law.

1. The simple profit tax for legal entities for the tax period ending in 1995 shall be calculated according to the assessment rules of both the old and the new law. If the tax calculated under the new law is higher, then it shall be decisive; otherwise, the tax calculated under the old law, excluding extraordinary income pursuant to paragraph 3, shall be applicable.

2. If a loss arises according to the assessment rules of both the old and the new law, the lower loss carryforward shall be decisive.

3. Extraordinary income, such as realized capital gains, book revaluations of assets, dissolution of provisions, failure to make commercially justified depreciation and provisions in the financial years ending in 1993 and 1994, shall be subject to a special tax assessed in accordance with Article 87 of this law, insofar as they are not used to cover offsettable losses.

4. To the extent that the financial year concluded in 1995 extends back into 1994, the profit and capital tax resulting for this period under the old law shall be credited against the profit and capital tax resulting for the same period under the new law; any surplus shall not be refunded.

1. Tax obligations incurred before the entry into force of this law are not considered business-related expenses according to Art. 79 letter a of this law.

1. For associations, foundations, and other legal entities, Article 298 of this law applies mutatis mutandis. The applicable tax rate is the one set for the year 1995.

2. Extraordinary income earned in the years 1993 and 1994 is subject to an annual tax in accordance with Article 67 of this law; it is taken into account as rate-determining in the comparative calculation pursuant to Article 298, paragraph 1 of this law.

1. The tax on the capital gain realized by a real estate company established before January 1, 1993, upon transferring its property to the shareholder, will be reduced by 75 percent if the company is dissolved.

2. The tax on the liquidation proceeds received by the shareholder will be reduced in the same proportion.

3. The liquidation and dissolution of the real estate company must be completed no later than December 31, 1999.

1. Real Estate Capital Gains and Transfer Taxes shall be levied according to the new law if the disposal is executed after January 1, 1995.

2. In cases of disposals that only led to a deferral or exemption from taxation under the old law, the calculation of the gain based on the duration of ownership shall refer back to the previous disposal.

3. The Government Council is authorized, subject to the approval of the Cantonal Council, to conclude agreements with other cantons regarding the mutual extension of the conditions for tax deferral on real estate capital gains taxes related to substitute acquisitions to the territory of the other canton.

4. Art. 262 of this law applies only to disposals of real estate that are registered in the land register after January 1, 1995. The statutory liens that arose before this date for tax claims on real estate are subject to the old law.

5. Art. 262 of this law requires federal approval.

1. Objections to assessments, appeals, and complaints to the administrative court filed before January 1, 1995, shall be processed by the respective instance according to the old law.

1. This law shall enter into force on January 1, 1995.

1. The amended law shall first apply to the tax period beginning on January 1, 2001. Assessments up to and including the 2000 tax year shall be carried out under the old law.

1. The transition from biennial assessment with retrospective calculation to annual assessment with current calculation for natural persons will take place at the beginning of the year 2001.

2. The income tax for natural persons for the first tax period following the transition will be assessed according to the new law.

3. Extraordinary income, which is earned in the years 1999 and 2000 or during a fiscal year concluded within these years, is subject to a full annual tax at the rate determined solely by this income for the tax year in which it was received; Articles 39 and 40 of this law are reserved. The general deductions under Article 35 and the social deductions under Article 37 of this law are not granted. Expenditures directly related to the generation of extraordinary income can be deducted.

4. Extraordinary income particularly includes capital gains, periodic and non-periodic asset returns, lottery winnings, as well as extraordinary income from independent self-employment, in analogous application of Article 298, paragraph 3 of this law.

5. If there is a tax liability in the canton as of January 1, 2001, the extraordinary expenditures incurred on average during the years 1999 and 2000 will be additionally deducted from the taxable income that was the basis for the 1999/2000 tax period. Assessments that have already become legally binding will be revised in favor of the taxable person. The procedure is subject to the analogous application of Article 228 of this law. Overpaid tax amounts will be refunded without interest on the refund.

6. Extraordinary expenditures are considered to be

a. Maintenance costs for real estate, insofar as they annually exceed the lump-sum deductions according to Article 15, paragraph 4 of the implementing ordinance to the old tax law; the relevant factor is the age of the real estate as of January 1, 1999;

b. Contributions by the insured to occupational pension schemes for the purchase of contribution years;

c. Costs related to illness, accident, disability, further education, and retraining, to the extent that these exceed the already considered expenditures.

1. In the year 2001, a tax return completed in accordance with the provisions of Articles 190, 191, and 192 of the Tax Code (StG) and in accordance with the provisions for the two-year period assessment must be submitted. It may be considered for the determination of the estimated tax amount for the provisional tax assessment in accordance with Article 246 of this law.

1. Capital gains taxes on real estate are levied according to new law if the transfer of ownership occurs after January 1, 2001.

2. In the case of disposals that have led to a tax deferral or tax exemption only under previous law, the calculation of the gain based on the duration of ownership shall refer to the earlier disposal.

3. In the event of replacement acquisition in another canton pursuant to Art. 145 letters d and e of this law, the gain is not taxed if the other canton recognizes a corresponding deferral arrangement and offers reciprocity.

1. Contributions pursuant to Art. 35 para. 1 letter e of this law, which were paid in the years 1999 and 2000 and could not be deducted from income due to the assessment gap, shall be deducted from the paid capital benefit for taxation purposes under Art. 40 of this law upon request of the taxpayer.

1. Capital gains on participations as well as the proceeds from the sale of associated subscription rights are not considered in the calculation of the net yield pursuant to Art. 88 para. 2 of this Act, if the relevant participations were already owned by the corporation or cooperative before January 1, 1997, and the mentioned gains were realized before January 1, 2007.

2. For participations that were owned by the corporation or cooperative before January 1, 1997, the profit tax values at the beginning of the fiscal year ending in the calendar year 1997 are considered the acquisition costs (Art. 82 para. 4 and Art. 88 para. 5 letter a of this Act).

3. If a corporation or cooperative transfers a participation of at least 20 percent of the share or nominal capital of other companies, which was owned by it before January 1, 1997, to a foreign group company, the difference between the profit tax value and the market value of the participation is included in the taxable net profit. In this case, the relevant participations continue to be part of the participations held before January 1, 1997. At the same time, the corporation or cooperative is entitled to establish an untaxed reserve in the amount of this difference. This reserve must be dissolved in a tax-effective manner if the transferred participation is sold to an independent third party, if the company, whose participatory rights were transferred, sells its assets and liabilities to a substantial extent, or if it is liquidated. The corporation or cooperative must attach a list of the participations for which an untaxed reserve exists within the meaning of this article to every tax return. On December 31, 2006, the untaxed reserve is dissolved in a tax-neutral manner.

1. Art. 22 para. 1 let. a of this Act is applicable to single premium life insurance policies concluded after December 31, 1998.

1. ...[39]

1. The amended law shall first apply to the tax period commencing on January 1, 2006. Assessments up to and including the tax year 2005 shall be conducted under the old law.

1. The taxation of a capital gain that arose from the transfer of real estate from business assets to private assets before January 1, 2006, but was deferred by means of a reverse, is governed by the old law.

1. The distribution of profit and capital tax revenue pursuant to Articles 92a and 101a of this law shall first be applied to the tax period commencing on January 1, 2006. Tax revenues from assessments up to and including the 2005 tax year shall be distributed according to the old law.

1. Capital gains taxes on real estate are levied under the new law if the transfer of ownership occurs after January 1, 2006.

1. The canton shall provide the following annual contributions to mitigate the tax shortfalls of municipalities from 2006 to 2015

a. 2006: 6.3 million Swiss francs;

b. 2007: 5.25 million Swiss francs;

c. 2008: 5.7 million Swiss francs;

d. 2009: 5.15 million Swiss francs;

e. 2010: 4.1 million Swiss francs;

f. 2011: 3.0 million Swiss francs;

g. 2012: a maximum of 4.1 million Swiss francs;

h. 2013: a maximum of 3.075 million Swiss francs;

i. 2014: a maximum of 2.05 million Swiss francs;

j. 2015: a maximum of 1.025 million Swiss francs.

1. The disbursement of funds according to Article 317 letters a to f of this Act is made according to the following distribution key

a. Municipality of Sarnen

1. 2006: CHF 1,496,621

2. 2007: CHF 1,248,535

3. 2008: CHF 1,330,155

4. 2009: CHF 1,204,452

5. 2010: CHF 956,366

6. 2011: CHF 621,965

a2. Roman Catholic Church Community of Sarnen

1. 2006: CHF 150,435

2. 2007: CHF 125,220

3. 2008: CHF 135,506

4. 2009: CHF 121,851

5. 2010: CHF 96,636

6. 2011: CHF 71,820

b. Municipality of Kerns

1. 2006: CHF 720,128

2. 2007: CHF 595,019

3. 2008: CHF 629,912

4. 2009: CHF 548,386

5. 2010: CHF 423,276

6. CHF 349,260

b2. Roman Catholic Church Community of Kerns

1. 2006: CHF 95,145

2. 2007: CHF 78,760

3. 2008: CHF 82,348

4. 2009: CHF 72,107

5. 2010: CHF 55,722

6. 2011: CHF 41,487

c. Municipality of Sachseln

1. 2006: CHF 745,719

2. 2007: CHF 621,280

3. 2008: CHF 659,244

4. 2009: CHF 593,581

5. 2010: CHF 469,142

6. 2011: CHF 310,882

c2. Roman Catholic Church Community of Sachseln

1. 2006: CHF 110,379

2. 2007: CHF 92,146

3. 2008: CHF 95,282

4. 2009: CHF 86,246

5. 2010: CHF 68,013

6. 2011: CHF 36,515

d. Municipality of Alpnach

1. 2006: CHF 778,725

2. 2007: CHF 647,161

3. 2008: CHF 692,568

4. 2009: CHF 618,070

5. 2010: CHF 486,506

6. 2011: CHF 359,715

d2. Roman Catholic Church Community of Alpnach

1. 2006: CHF 109,356

2. 2007: CHF 91,160

3. 2008: CHF 95,393

4. 2009: CHF 85,955

5. 2010: CHF 67,759

6. 2011: CHF 41,013

e. Municipality of Giswil

1. 2006: CHF 648,035

2. 2007: CHF 540,617

3. 2008: CHF 626,775

4. 2009: CHF 572,357

5. 2010: CHF 464,939

6. 2011: CHF 421,724

e2. Roman Catholic Church Community of Giswil

1. 2006: CHF 79,117

2. 2007: CHF 66,117

3. 2008: CHF 75,679

4. 2009: CHF 69,454

5. 2010: CHF 56,454

6. 2011: CHF 47,362

f. Municipality of Lungern

1. 2006: CHF 605,773

2. 2007: CHF 508,829

3. 2008: CHF 555,515

4. 2009: CHF 517,363

5. 2010: CHF 420,419

6. 2011: CHF 254,517

f2. Roman Catholic Church Community of Lungern

1. 2006: CHF 58,185

2. 2007: CHF 48,723

3. 2008: CHF 53,566

4. 2009: CHF 49,349

5. 2010: CHF 39,887

6. 2011: CHF 27,181

g. Municipality of Engelberg

1. 2006: CHF 659,264

2. 2007: CHF 550,516

3. 2008: CHF 627,964

4. 2009: CHF 574,551

5. 2010: CHF 465,803

6. 2011: CHF 392,587

h. Protestant Reformed Church Community of Obwalden

1. 2006: CHF 43,188

2. 2007: CHF 35,917

3. 2008: CHF 40,093

4. 2009: CHF 36,278

5. 2010: CHF 29,078

6. 2011: CHF 23,972

1. **The Tax Strategy Compensation for the Years 2012 to 2015 Pursuant to Art. 317 Letters g to j of this Law is Granted Based on the Tax Revenue Achieved by the Respective Municipality During the Fiscal Year.**

2. If a Municipality Reduces the Municipal Tax Rate, it Forfeits the Right to the Tax Strategy Compensation According to Art. 317 Letters g to j of this Law.

3. The Details of the Calculation and Payment are Regulated by the Executive Council in Implementing Provisions.

1. The cantonal financial administration is tasked with the execution.

1. The Executive Council monitors and analyzes the development of tax revenues of the canton and the municipalities and reports at least every four years to the Cantonal Council and the municipalities, submitting proposals for any necessary measures.

1. The amended law shall first apply to the tax period beginning on January 1, 2011. Assessments up to and including the tax year 2010 shall be carried out under the old law.

1. The amended law shall apply for the first time to the tax period beginning on January 1, 2016. Assessments up to and including the tax year 2015 will be conducted according to the old law.

2. For natural persons who were taxed based on expenses at the time the amended law came into force, Article 16 of the previous law shall continue to apply until December 31, 2020.

1. The canton provides annual compensation contributions to mitigate tax revenue shortfalls for the years 2017 to 2019.

2. Eligible for compensation are those municipalities whose tax capacity is less than 100 percent of the average of all municipalities (financially weak municipalities) and whose annual income from gift and inheritance taxes is below CHF 500,000 as of December 31, 2016.

3. The compensation contributions include

a. 2017: CHF 40,000 for each eligible municipality;

b. 2018: CHF 30,000 for each eligible municipality;

c. 2019: CHF 20,000 for each eligible municipality.

1. For the assessment of offenses committed in tax periods before the amendment of December 5, 2018, the new law is applicable if it is more lenient than the law applicable during those tax periods.

1. Companies that lost or relinquished their status as a holding or management company according to Articles 89 and 90 of the previous law after December 31, 2016, but before January 1, 2020, and in doing so disclosed existing hidden reserves, including self-created added value, may, upon request, write off the disclosed hidden reserves, including self-created added value, that still existed as of January 1, 2020, by no later than December 31, 2024. Article 79b of this law remains reserved. To the extent that the disclosed hidden reserves still exist on December 31, 2024, they must be dissolved tax-neutrally as of that date.

2. Companies that were taxed according to Articles 89 and 90 of the previous law and have not submitted an application according to paragraph 1 may apply for the hidden reserves, including self-created added value existing at the time of the status change, to be determined by an order, and if realized, to be taxed separately by December 31, 2024, insofar as they would not have been taxable until now. The fixed special tax amounts to 1 percent for the tax year 2020, 1.2 percent for the tax year 2021, 1.4 percent for the tax year 2022, 1.6 percent for the tax year 2023, and 1.8 percent for the tax year 2024. The application must be submitted in writing with the tax return for the first period after the removal of the tax status and must include the necessary information for the evaluation of the hidden reserves, including self-created added value.

1. For the tax years 2020 to 2024, the tax rate of the cantonal tax shall be increased by 0.1 units.