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631.1 STGLFLT CH-ZH

Tax Law (TL) (STG)

322 Articles / Provisions · Switzerland · Canton of Zurich
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Table of Provisions (322)

Art. 1 Art. 1. 1 The current members of the Tax Appeals Commissions Art. 1. The Issuance of Bonus Shares, Bonus Par Value Increases, Capital Art. 2 Art. 3 Art. 4 Art. 5 Art. 6 Art. 7 Art. 8 Art. 9 Art. 9a Art. 10 Art. 11 Art. 12 Art. 13 Art. 14 Art. 15 Art. 16 Art. 17 Art. 17a Art. 17b Art. 17c Art. 17d Art. 18 Art. 18a Art. 18b Art. 19 Art. 19a Art. 20 Art. 20a Art. 21 Art. 22 Art. 23 Art. 24 Art. 25 Art. 26 Art. 27 Art. 28 Art. 30 Art. 31 Art. 32 Art. 33 Art. 34 Art. 35 Art. 36: Tax Act (TA) Art. 37 Art. 37a Art. 37b Art. 38 Art. 39 Art. 39a Art. 40 Art. 41 Art. 42 Art. 43 Art. 44 Art. 45 Art. 46: Tax Act (TA) Art. 47 Art. 48 Art. 49 Art. 50 Art. 51 Art. 52 Art. 53: Tax Act (TA) Art. 54 Art. 55 Art. 56 Art. 57 Art. 58 Art. 59 Art. 60 Art. 61 Art. 62 Art. 63 Art. 64 Art. 64a Art. 64b Art. 64c : Tax Law (TL) Art. 64d Art. 65 Art. 65a Art. 65b Art. 65c : Tax Act (TA) Art. 66 Art. 67 Art. 68 Art. 69 Art. 69a Art. 70 Art. 71 Art. 72 Art. 72a Art. 76 Art. 77 Art. 78 Art. 79 Art. 80 Art. 81 Art. 81a Art. 82 Art. 83 Art. 84 Art. 85 Art. 86 Art. 87 Art. 88 Art. 89 Art. 90 Art. 91 Art. 92 Art. 93 Art. 93a Art. 94 Art. 95 Art. 96 Art. 97 Art. 98 Art. 99 Art. 100 Art. 101 Art. 101a Art. 101b Art. 101c Art. 102 Art. 103 Art. 104 Art. 105 Art. 106 Art. 107 Art. 108 Art. 109 Art. 109a : Tax Act (TA) Art. 109b : Tax Act (TA) Art. 109c Art. 109d Art. 110 Art. 111 Art. 112 Art. 113 Art. 113a Art. 114 Art. 115 Art. 116 Art. 117 Art. 118: Tax Act (TA) Art. 118a Art. 119 Art. 120 Art. 121 Art. 122: Tax Act (TA) Art. 123 Art. 124 Art. 125 Art. 126 Art. 127 Art. 128 Art. 129 Art. 130 Art. 131 Art. 132 Art. 133 Art. 134 Art. 135 Art. 136 Art. 137 Art. 137a Art. 138 Art. 139 Art. 140 Art. 141 Art. 142 Art. 143: Tax Law (TL) Art. 143a : Tax Act Art. 144 Art. 145 Art. 146 Art. 147 Art. 148 Art. 149 Art. 150 Art. 150a Art. 150b : Tax Law (TL) Art. 151 Art. 152 Art. 153 Art. 154 Art. 155 Art. 156 Art. 157 Art. 158 Art. 159 Art. 160 Art. 161 Art. 162 Art. 162a Art. 163 Art. 164 Art. 165: Tax Law (TL) Art. 166 Art. 167 Art. 168 Art. 169 Art. 170 Art. 171 Art. 171a : Tax Law (TL) Art. 172 Art. 173 Art. 174 Art. 175 Art. 176 Art. 177 Art. 178 Art. 179 Art. 180 Art. 181 Art. 182 Art. 183 Art. 184 Art. 185 Art. 186 Art. 187 Art. 188 Art. 189 Art. 190 Art. 191 Art. 192 Art. 193 Art. 194 Art. 195 Art. 196 Art. 197 Art. 198 Art. 199 Art. 200 Art. 201 Art. 202 Art. 203 Art. 204 Art. 205 Art. 206 Art. 207 Art. 208 Art. 209 Art. 210 Art. 211 Art. 212 Art. 213 Art. 214 Art. 215 Art. 216 Art. 217 Art. 218 Art. 219 Art. 220 Art. 221 Art. 222 Art. 223 Art. 224 Art. 224a is applicable to changes of ownership that occur after the entry into force: Tax Act (StG) Art. 224a Art. 225 Art. 226 Art. 226a Art. 234 Art. 235 Art. 236 Art. 237 Art. 238 Art. 239 Art. 240 Art. 241 Art. 241a Art. 242 Art. 243 Art. 244 Art. 245 Art. 246 Art. 247 Art. 248 Art. 249 Art. 250 Art. 251 Art. 251a Art. 252 Art. 253 Art. 254 Art. 255 Art. 256 Art. 257 Art. 258 Art. 259 Art. 260 Art. 261 Art. 262 Art. 263 Art. 264 Art. 265 Art. 266 Art. 267 Art. 268 Art. 269 Art. 270 Art. 271 Art. 272 Art. 273 Art. 274 Art. 275 Art. 276 Art. 277 Art. 278 Art. 279 Art. 280: Tax Act (TA) Art. 281 Art. 282 Art. 282a Art. 282b Art. 283 Art. 284 Art. 285 Art. 670

Statutory Text (322 Articles)

Art. 1: Tax Law (TL) Open official source

The Canton levies annually as state taxes

a. Income and wealth taxes from natural persons*,

b. Profit and capital taxes from legal entities,

c. Withholding taxes from certain natural and legal persons.

I. Types of Taxes

Art. 1. 1 The current members of the Tax Appeals Commissions: Tax Act (StG) Open official source

remain in office until the expiry of their term of office under previous law.

2 The salary and other terms of employment are governed by previous law.

94

Tax Act (StG)

631.1

Transitional Provision for the Amendment of July 4, 2011 (Official Collection 66, 834)

For successions opened before January 1, 2010, the provisions concerning subsequent taxation under previous law are applicable.

Transitional Provision for the Amendment of September 17, 2012 (Official Collection 68, 46)

Compensation for Cold Progression

The compensation for cold progression according to the amended § 48 shall take place for the first time at the beginning of the tax rate period following the entry into force of this amendment. For the compensation, the level of the national consumer price index up to which cold progression was last compensated shall be used as the starting point.

Transitional Provision for the Amendment of May 5, 2014 (Official Collection 69, 403)

Higher amounts resulting from the compensation for cold progression in § 31 para. 1 lit. g and § 34 para. 1 lit. a at the time of the entry into force of the amendment of May 5, 2014 remain reserved.

Transitional Provision for the Amendment of October 23, 2017 (Official Collection 73, 583)

Art. 1. The Issuance of Bonus Shares, Bonus Par Value Increases, Capital: Tax Law (TL) Open official source

and the like are taxed as income upon capital repayments, provided that the issuance or increase took place before the entry into force of the amendment of April 1, 2019. Article 20 paragraph 2 in the version pursuant to the amendment of April 1, 2019 remains reserved.

1. 1. 25-127

95

631.1

Special Tax

Tax Act (TA)

Art. 2: Tax Act (TA) Open official source

1 The tax calculated on the basis of the tax rates set forth in this law is the simple cantonal tax.

II. Tax Rate

2 The Cantonal Council shall set the tax rate as a percentage of the simple cantonal tax for every two calendar years. The Government Council may propose increases in the tax rate within the tax rate period to cover at most half of the depreciations of a financial deficit included in its draft budget.38

3 The tax rate applies uniformly to all types of taxes.

Section Two: Taxation of Natural Persons

A. Tax Liability

Art. 3: Tax Act (TA) Open official source

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

I. Personal

Affiliation

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

* Regardless of whether feminine or masculine formulations are used in individual cases, the person-related formulations in the Tax Law apply to female and male persons, unless the nature of the matter indicates that a term can be interpreted exclusively for members of a specific gender.

1. 1. 25-127

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Tax Law (StG)

II. Economic

Affiliation

III. Scope of

Tax Liability

3. A person has a tax residence in the canton if they reside here, regardless of temporary interruptions, for at least 30 days while exercising a gainful activity, or for at least 90 days without exercising a gainful activity.

Art. 4: Tax Law (TL) Open official source

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

a. maintain business enterprises or permanent establishments in the canton,

b. own real estate in the canton, have proprietary rights, or personal usufructuary rights economically equivalent thereto,

c.97 trade in real estate located in the canton.

2 Individuals without a tax domicile or residence in Switzerland are subject to tax based on economic affiliation if they

a. carry out gainful activity in the canton,

b.70 receive director's fees, meeting attendance fees, fixed remuneration, employee participations, or similar emoluments as members of the administration or management of legal entities with their seat or permanent establishment in the canton,

c. are creditors or beneficiaries of claims secured by a mortgage or pledge on real estate in the canton,

d.98 mediate real estate located in the canton,

e. receive pensions, retirement benefits, or other payments from an employer or a provident institution with its seat in the canton, based on a former public-law employment relationship,

f. receive benefits from Swiss private-law occupational pension schemes or from recognized forms of restricted private provision with their seat or permanent establishment in the canton,

g.112 receive wages or other remuneration from an employer with its seat or permanent establishment in the canton for work in international transport aboard a ship or an aircraft or for transport by road; taxation of seafarers for work aboard a high-seas vessel remains excluded.

Art. 5: Tax Act (TA) Open official source

98 1 In the case of personal affiliation, tax liability is unlimited; however, it does not extend to businesses, permanent establishments, and real estate outside the canton.

Tax Law (StG) 631.1

1. 1. 25 - 127

2 In the case of economic affiliation, tax liability is limited to those parts of income and assets for which a tax liability exists in the canton according to § 4. Taxpayers without tax domicile or residence in Switzerland must at least declare for tax purposes the income earned in the canton and the assets located in the canton.

3 The demarcation of tax liability for businesses, permanent establishments, and real estate in relation to other cantons and abroad is based on the principles of federal law regarding the prohibition of intercantonal double taxation. If a Swiss enterprise has offset losses from a foreign permanent establishment against domestic profits, but within the following seven years records profits from that permanent establishment, a revision of the original assessment must be made to the extent of the profits that are deductible in the state of the permanent establishment; in this case, losses from this permanent establishment will subsequently only be considered for the tax rate in Switzerland. In all other cases, foreign losses are to be considered exclusively for the tax rate. Regulations contained in double taxation agreements remain reserved.

IV. Tax calculation in case of partial tax liability

Art. 6: Tax Act (TA) Open official source

98 1 Taxable persons who are taxable in the canton for only a part of their income and wealth shall pay taxes on the values taxable in the canton at the tax rate corresponding to their total income and wealth.

2 Taxable persons without a tax domicile or residence in Switzerland shall pay taxes for businesses, permanent establishments, and real estate in the canton at least at the tax rate corresponding to the income generated in the canton and the wealth located in the canton.

V. Spouses;

Registered

Partners;

Children under

Parental Care44

Art. 7: Tax Law (TL) Open official source

1 Income and assets of spouses living in a legally and

factually undivided marriage are aggregated without regard to

the matrimonial property regime.

1bis Income and assets of persons living in a legally and

factually undivided registered partnership are aggregated.43

1ter The position of registered partners corresponds

in this law to that of spouses. This also applies to

maintenance contributions during the existence of the registered partnership

as well as to maintenance contributions and the distribution of property

in the event of separation and dissolution of a

registered partnership.43

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Tax Law (StG)

VI. Taxation of

Communities of

Persons

1. Simple

Partnerships,

General and

Limited

Partnerships;

Foreign

Commercial

Companies and

Other Foreign

Communities of

Persons

2. Communities

of Heirs

3. Collective

Investment

Schemes

2 If spouses live in a legally and factually undivided marriage,

but only one spouse has their tax domicile or

residence in the canton, while the other spouse resides in another

canton, the tax liability of the spouse residing in the canton

is determined according to the principles of federal law concerning the

prohibition of intercantonal double taxation. If the other

spouse resides abroad, the spouse residing in the canton is

subject to tax on their entire income and assets; any income and asset values

attributable to an out-of-canton property or permanent establishment

or a restriction by a double taxation agreement remain

reserved even in this case. For the tax rate, the entire marital

income and assets are to be used, applying the married tariff and

the social deductions for married persons.

3 Income and assets of children under parental care

are attributed to the holder of parental care until the beginning of the year in which they

reach legal age. In the case of children under joint care of

parents who are not jointly taxed, the attribution is made to the parent

who is entitled to the child deduction within the meaning of § 34

para. 1 lit. a. Earned income, for which the minor child is taxed

independently, remains reserved.63

Art. 8: Tax Act (TA) Open official source

1 Simple Partnerships, General Partnerships and Limited Partnerships

**are not taxable as such; their income and assets are attributed to the partners and limited partners.**

**2 Foreign trading companies and other foreign unincorporated associations that are taxable on account of their economic affiliation shall pay their taxes in accordance with the provisions for legal entities.**

Art. 9: Tax Act (TA) Open official source

1. Heirs’ associations as such are not subject to taxation; their income and assets are attributed to the individual heirs or legatees.

2. If the succession is uncertain, the heirs’ association as a whole is taxed according to the provisions applicable to natural persons.

Art. 9a : Tax Law (TL) Open official source

48 Income and assets of collective investment schemes

pursuant to the Collective Investment Schemes Act of 23 June 2006 (CISA)

shall be attributed proportionally to the investors; excluded herefrom

are collective investment schemes with direct real estate holdings.

4

Tax Act (TA)

631.1

Art. 10 : Tax Act (TA) Open official source

1 The tax liability begins at the time when VII. Commencement

the taxpayer establishes tax domicile or residence in the canton or and Termination of

acquires taxable assets in the canton.

Tax Liability

2 The tax liability ends with the death or departure of the taxpayer

from the canton or with the cessation of the taxable assets in the canton.

3 The consequences of the commencement, change, and termination of tax

liability due to personal and economic affiliation are regulated

in intercantonal relations by the Federal Act on the Harmonisation of Direct

Taxes of the Cantons and Municipalities19 and by the principles of federal

law regarding the prohibition of intercantonal double taxation.29

Art. 11: Tax Law (TL) Open official source

1. Upon the death of the taxpayer, their heirs succeed to their tax

rights and obligations. They are jointly and severally liable for the taxes owed by the deceased up to the value of their inheritance, including advance inheritances.

2. The surviving spouse is liable with their share of the inheritance and the amount they receive from the excess or total matrimonial property beyond the statutory share under Swiss law, based on matrimonial property law.

3. The surviving registered partner is liable with their share of the inheritance and the amount they have received pursuant to a property arrangement within the meaning of Art. 25 para. 1 of the Partnership Act of 18 June 2004.

Art. 12: Tax Act (TA) Open official source

1 Spouses living in a legally and de facto undivided marriage – IX. Liability

are jointly and severally liable for the total tax. Each spouse

is, however, 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 that is attributable to the child’s income.

**2 The following are jointly and severally liable with the taxpayer:**

a.30 children under his parental care up to the

amount of their share of the total tax,

b. partners residing in Switzerland of a simple partnership,

general partnership, or limited partnership up to the amount

of their partnership shares for the taxes of partners residing

abroad,

1. 1. 25-127

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Tax Law (StG)

c. buyers and sellers of real estate located in the canton

up to 3 percent of the purchase price for the taxes owed by

the dealer or broker from this activity, if the

dealer or broker does not have a tax domicile in Switzerland;

buyers and sellers are, however, only liable to the extent that

they have placed a corresponding order with a dealer or broker

with a tax domicile abroad.

d. persons who liquidate businesses or permanent establishments in the

canton or sell or realise real estate located in the canton or claims

secured by such, up to the amount of the net proceeds, if the

taxpayer does not have a tax domicile in Switzerland.

**3 The administrator of the estate and the executor are jointly and severally liable**

with the successor in tax for the tax of the deceased up to the

amount attributable to the tax according to the state of the estate at the time

of death. Liability ceases if the liable party proves that they have

exercised all due diligence required by the circumstances.

Art. 14: Tax Act (TA) Open official source

1 The members of diplomatic and consular missions accredited to the Confederation, as well as the members of international organizations established in Switzerland and of representations existing at such organizations, are exempt from taxation to the extent that federal law provides for a tax exemption.

2 In the event of partial tax liability, Article 6 paragraph 1 applies.

Art. 15: Tax Act (TA) Open official source

For sole proprietorships and partnerships newly established and serving the economic interests of the Canton, the Government Council, in agreement with the competent municipality, may grant appropriate tax relief for a maximum of the opening year and the nine subsequent years. A material change in business activity may be treated as a new establishment.

X.78 Members of

Diplomatic

and Consular

Missions

XI.78 Tax Relief

for Businesses

B. Income Tax

I. Taxable

Income

1. General

Art. 16: Tax Act (TA) Open official source

1 All recurrent and one-off income is subject to income tax.

2 Income also includes benefits in kind of all types, especially free

board and lodging, as well as the value of products and goods from

one's own business consumed by oneself.

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Tax Law (StG)

631.1

3 Capital gains from the disposal of private assets are tax-exempt.

The real estate gains tax is reserved.

Gainful Activity

Art. 17: Tax Law (TL) Open official source

1. Taxable income includes all income from private or public law employment relationships, including ancillary income such as compensation for special services, commissions, allowances, seniority and jubilee gifts, gratuities, tips, royalties, monetary benefits from employee participations, and other monetary benefits.

2. Costs for job-related education and training, including retraining costs, borne by the employer, regardless of their amount, do not constitute another monetary benefit within the meaning of para. 1.

3. Capital payments from a pension scheme associated with the employment relationship or similar capital payments from the employer are taxed according to § 37.

a. Principle

b. Employee-

Art. 17a : Tax Act (TA) Open official source

69 Employee Participation Plans

1 Genuine employee participation plans include

a. shares, dividend-right certificates, participation certificates, cooperative shares, or other forms of equity participations that the employer, its parent company, or another group company issues to employees;

b. options to acquire participations under lit. a.

2 Non-genuine employee participation plans include entitlements to mere cash settlements.

Art. 17b: Tax Act (TA) Open official source

69 1 Monetary benefits from genuine employee participations, c. Income

other than from blocked or unlisted options, are taxable as income from

dependent employment at the time of acquisition. The taxable benefit corresponds to their fair market value, reduced by any acquisition price.

2 In the case of employee shares, lock-up periods shall be taken into account for the calculation of the taxable benefit, with a discount of 6 percent per lock-up year on their fair market value. This discount applies for a maximum of ten years.

3 Monetary benefits from blocked or unlisted employee options are taxed at the time of exercise. The taxable benefit corresponds to the fair market value of the share at the time of exercise, reduced by the exercise price.

Art. 17c : Tax Act (TA) Open official source

69 Monetary benefits from sham employee participation plans are taxable at the time of their inflow.

d. Income

from sham

employee

participation

plans

1. 1. 25-127

7

e. Pro rata

taxation

3. Self-employment

a. Principle

b. Deferral

provisions

c. Partial taxation

of income from

participations

held as business

assets

631.1

Tax Act (TA)

Art. 17d: Tax Act (TA) Open official source

69 If the taxpayer did not have tax residence or a permanent establishment in Switzerland for the entire period between the acquisition and the creation of the right to exercise the blocked employee options (Article 17b para. 3), the monetary benefits derived therefrom will be taxed proportionally to the ratio between the total period and the period spent in Switzerland.

Art. 18: Tax Act (TA) Open official source

1 Taxable are all income from a trade, industrial, commercial, agricultural, and forestry enterprise, from a liberal profession, as well as from any other independent gainful activity.

2 Income from independent gainful activity also includes all capital gains from the sale, realization, or book-based revaluation of business assets. Equivalent to a sale is the transfer of business assets into private assets or into foreign enterprises or permanent establishments.30

3 Business assets are considered to be all assets that serve entirely or predominantly the independent gainful activity. The same applies to participations of at least 20 percent in the share or nominal capital of a corporation or cooperative, provided that the owner declares them as business assets at the time of acquisition. 29

4 For taxpayers who maintain proper accounting, § 64 applies mutatis mutandis.

5 Gains on real estate that is part of business assets are attributed to the taxable income to the extent that the acquisition price and value-enhancing expenses, including construction loan interest, exceed the income tax value.

Art. 18a: Tax Act (TA) Open official source

76 1 The leasing out of a business operation shall only be considered as a transfer into private assets upon application by the taxable person.

**2 If, in the case of an inheritance division, the business operation is not continued by all heirs, the taxation of the hidden reserves shall be deferred, upon request by the heirs taking over the business, until later realisation, provided that these heirs take over the values previously decisive for income tax purposes.**

Art. 18b : Tax Law (TL) Open official source

92 1 Dividends, profit shares, liquidation surpluses

and monetary benefits from shares, participations in limited liability

companies, cooperative shares, and participation certificates,

as well as gains from the disposal of such equity rights,

are taxable at 50 percent after deduction of attributable expenses,

if these equity rights represent at least 10 percent of the

share capital or common stock of a corporation or cooperative.

8

Tax Law (StG)

631.1

2 Partial taxation on capital gains is only granted

if the disposed equity rights were held for at least one year

by the taxable person or the personal enterprise.

Art. 19: Tax Law (TL) Open official source

39 1 **Silent Reserves of a Sole Proprietorship, etc. (Einzel- 93 Restructurings**

**firma, partnership)** are not taxed in the event of restructurings, particularly

in the case of merger, demerger or conversion, provided that

the tax liability in Switzerland continues to exist and the values previously

relevant for income tax are adopted

a. upon the transfer of assets to another sole proprietorship or

partnership,

b. upon the transfer of a business or a part of a business to a

legal entity,

c. upon the exchange of equity or membership rights

in connection with restructurings within the meaning of § 67 para. 1 or

merger-like combinations.

2 In the case of a restructuring pursuant to para. 1 lit. b, the transferred

silent reserves shall be subsequently taxed in the post-taxation procedure

according to §§ 160–162, insofar as equity or membership rights are

disposed of at a price exceeding the transferred tax equity within the five

years following the restructuring; in this case, the legal entity can claim

corresponding silent reserves taxed as profit.

Art. 19a : Tax Act (TA) Open official source

92 For income from patents and comparable e. Income

rights, Sections 64a and 64b are analogously applicable.

from Patents

and Comparable

Rights

Art. 20: Tax Law (TL) Open official source

93 1 Taxable are the yields from movable assets, 4. Movable

specifically

a.30 Interest from credits, including paid-out yields from

single-premium redeemable life insurance policies in the

event of survival or upon surrender, unless these life insurance policies

serve for retirement provision. Serving for retirement provision is considered

the payment of the insurance benefit from the completed

60th year of age of the insured based on a contract relationship of at least five

years, which was established before the completion of the 66th year of age.

In this case, the benefit is tax-exempt.

b. Income from the disposal or redemption of bonds

with predominant single payment of interest (globally remunerated

bonds, discount bonds), accruing to the holder,

Assets

a. General 48

1. 1. 25-127

9

631.1

Tax Act (StG)

c. Dividends, profit shares, liquidation surpluses, and pecuniary

advantages from participations of all kinds (including bonus

shares, gratuitous nominal value increases, and the like). A liquidation

surplus realized upon the return of participation rights in the sense of Art. 4a

of the Federal Act of 13 October 1965 on Withholding Tax (VStG)20

to the corporation or cooperative is deemed realized in the year in which the

withholding tax claim arises (Art. 12 para. 1 and 1bis

VStG); para. 2 remains reserved.

d. Income from the lease, tenancy, usufruct, or other use of movable

assets or usable rights,

e.49 Income from units in collective investment schemes, to the extent that the

total yields exceed the yields from direct real estate,

f. Income from intangible assets.

2 Dividends, profit shares, liquidation surpluses, and pecuniary

advantages from shares, units in limited liability companies, cooperative

shares, and participation certificates (including bonus shares, gratuitous

nominal value increases, and the like) are 50 percent taxable if these

participation rights represent at least 10 percent of the share or

registered capital of a corporation or cooperative.

3 The proceeds from subscription rights are not considered asset yields

if they belong to the private assets of the taxpayer.

4 The repayment of contributions, share premiums, and subsidies

(reserves from capital contributions) made by the holders of participation

rights after 31 December 1996 shall be treated in the same way as the

repayment of share or registered capital. Para. 5 remains reserved.

5 If a corporation or cooperative listed on a Swiss stock exchange

does not distribute other reserves to at least the same extent upon the

repayment of reserves from capital contributions according to para. 4, then

the repayment is taxable to the extent of half the difference between the

repayment and the distribution of the other reserves, but at most to the

extent of the other reserves available in the company that are distributable

under commercial law.

6 Para. 5 is not applicable to reserves from capital contributions

a. which arose after 24 February 2008 in merger-like combinations

through the contribution of participation and membership rights in a

foreign corporation or cooperative according to § 67 para. 1 lit. c or

10

Tax Act (StG)

631.1

through a cross-border transfer to a domestic subsidiary according to

§ 67 para. 1 lit. d,

b. which were already present in a foreign corporation or cooperative

at the time of a cross-border merger or restructuring according to

§ 67 para. 1 lit. b and para. 3 or the relocation of the registered

office or actual administration after 24 February 2008,

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

7 Paras. 5 and 6 apply mutatis mutandis to reserves from capital

contributions that are used for the issuance of bonus shares or for

gratuitous nominal value increases.

8 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 does not amount to at least half of the received liquidation

surplus, then the taxable portion of this liquidation surplus is reduced by

half the difference between this portion and the repayment, but at most to

the extent of the reserves from capital contributions available in the company

that are attributable to these participation rights.

9 Para. 4 applies to contributions and share premiums made during a capital

band according to Art. 653 ff. OR11 only to the extent that they exceed the

repayments of reserves within this capital band.111

Art. 20a : Tax Law (TL) Open official source

1 As investment income within the meaning of § 20 para. 1 lit. c, the following also applies

a. the proceeds from the sale of a participation of at least 20 percent in the share capital or

the cooperative capital of a corporation or cooperative from private assets into the business assets

of another natural person or a legal entity, to the extent that

within five years after the sale, with the cooperation of the seller, non-operating

substance is distributed, which was already in existence at the time of the sale and

distributable under commercial law; this applies mutatis mutandis even if within five

years several participants jointly sell such a participation or

participations totaling at least 20 percent are sold; distributed substance will be

subsequently taxed for the seller, if applicable, in proceedings according to §§ 160

para. 1, 161 and 162,

b. the proceeds from the transfer of a participation in the share capital or

the cooperative capital of a corporation or cooperative from

private assets into the business assets of a sole proprietorship, partnership or

a legal entity in which the transferor or contributor holds at least 50 percent

of the capital after the transfer, to the extent that the total consideration

received exceeds the sum of the nominal value of the transferred participation

and the contributions, premiums, and subsidies according to § 20 para. 4;

this applies mutatis mutandis even if several participants jointly carry out the transfer.

2 Cooperation within the meaning of para. 1 lit. a exists if the seller knows or must know

that funds are withdrawn from the company for the purpose of financing the purchase price

and are not repaid.

Special Cases

1. 1. 25-127

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Tax Law (StG)

5. Immovable

Property

Art. 21 : Tax Act (TA) Open official source

1 Taxable are all income from immovable property,

in particular

a. all income from rental, lease, usufruct or

other use,

b. the rental value of properties or parts of properties that

are available to the taxpayer for self-use due to ownership or a gratuitous right of use,

c. income from building lease contracts,

d. income from the exploitation of gravel, sand and other constituents of the soil.

2 The Government Council issues the necessary service instructions for the uniformly average assessment of the imputed rental value of properties or parts of properties occupied by the owner. A schematic, formula-based valuation of the imputed rental values may be provided. However, the following guidelines must be observed

a. the imputed rental value is to be set at a maximum of 70 percent of the market value, taking into account the promotion of home ownership and self-provision,

b. quality features of the properties or parts of properties, which would also significantly influence the rent in the case of rental, must be adequately taken into account within the framework of a schematic, formula-based valuation of the imputed rental values,

c. for properties or parts of properties occupied by the owner at their domicile, the imputed rental value must also be determined taking into account the actual use.

12

Tax Law (StG)

631.1

Art. 22 : Tax Law (TL) Open official source

### 6. Income from Pensions

30 1 All income from old-age, survivors' and disability insurance, from occupational pension schemes, and from recognized forms of restricted private provision, including capital payments and repayments of deposits, premiums, and contributions, are taxable.

2 Income from occupational pension schemes includes, in particular, benefits from pension funds, from savings and group insurance policies, and from vested benefits policies.

3 Life annuities and income from an annuity agreement are 40 percent taxable.

4 Income from assets encumbered with a usufruct or a right of abode is attributed to the usufructuary or the holder of the right of abode.

Art. 23 : Tax Act (TA) Open official source

Also taxable are

a. all other income that replaces income from gainful activity,

b. lump-sum or recurring payments upon death as well as for permanent physical or health disadvantages,

c. indemnities for the relinquishment or non-exercise of an activity,

d. indemnities for the non-exercise of a right,

e.

f.30 maintenance contributions received by a taxpayer for themselves upon divorce, judicial or de facto separation, as well as maintenance contributions received by a parent for children under their parental care or custody.

Art. 24: Tax Act (TA) Open official source

98 Income tax is not levied on

a. acquisition of assets as a result of inheritance, legacy, gift, or matrimonial property settlement,

b. acquisition of assets from redeemable private capital insurance, with the exception of vested benefits policies. § 20 para. 1 lit. a remains reserved,

c. capital payments made by the employer or by occupational pension schemes upon a change of employment, if the recipient uses them within one year to buy into an occupational pension scheme or to acquire a vested benefits policy,

d. subsidies from public or private funds,

e. benefits rendered in fulfillment of family law obligations, with the exception of maintenance contributions according to § 23 lit. f,

**7. Other Income**

**II. Tax-Exempt Income**

**1. 1. 25-127**

**13**

**631.1**

**Tax Act (StG)**

f.49 military and civil defence pay, as well as pocket money for civilian service,

g.109 the pay of militia firefighters up to an annual amount of CHF 8,300 for services rendered in connection with the fulfillment of the core tasks of the fire brigade (drills, standby duties, courses, inspections, and emergency deployments for rescue, firefighting, general disaster control, natural disaster management, and the like); lump-sum allowances for officers, functional allowances, and compensation for administrative work and for services voluntarily provided by the fire brigade are excluded,

h. the payment of satisfaction sums,

i. income based on federal legislation on supplementary benefits to old-age, survivors', and disability insurance,

j. winnings obtained in casinos from casino games licensed under the Federal Act of 29 September 2017 on Money Games (MGA)26, provided that these winnings do not originate from self-employment,

k.109 individual winnings up to an amount of CHF 1,033,000 from participation in large games licensed under the MGA26, and from online participation in casino games licensed under the MGA,

l. winnings from small games licensed under the MGA,

m. individual winnings from lotteries and skill games for sales promotion, which are not subject to the MGA according to Art. 1 para. 2 lit. d and e MGA, provided that the limit of CHF 1,000 is not exceeded.

n.111 income based on the Federal Act of 19 June 2020 on Bridging Benefits for Older Unemployed Persons24.

Art. 25 : Tax Law (TL) Open official source

To determine net income, the expenses necessary for its acquisition (Sections 26–30) and general deductions (Sections 31 and 32) are deducted from total taxable income.

Art. 26: Tax Act (TA) Open official source

89 1 As professional expenses, the following may be deducted

a. the necessary costs up to a maximum amount of Fr. 5200

for travel between the place of residence and the workplace,

b. the necessary additional costs for meals outside the

place of residence and for shift work,

c. the remaining costs required for the exercise of the profession;

Art. 27: Tax Law (TL) Open official source

112 3. Independent

Earned Income

a. General

1. 1. 25-127

15

631.1 Tax Law (StG)

1 When it comes to independent earned income, business-related or professional expenses shall be deducted.

2 These include, in particular

a. the reported depreciation of business assets,

b. the booked provisions for liabilities whose amount is still

uncertain, or for immediately impending loss risks, as well as

reserves for research and development contracts with third

parties up to 10 percent of taxable business income, but

not exceeding a total of 1 million Swiss francs,

c. the incurred and booked losses on business assets,

d. contributions to provident funds for the benefit of own staff,

provided that any misuse is excluded,

e.29 interest on business debts (excluding construction loan interest

for real estate in business assets) as well as interest attributable

to participations in accordance with § 18 para. 3,

f.80 the costs of vocational education and training, including re-

training costs, for own staff,

g. profit-skimming sanctions, insofar as they do not have a punitive

purpose.

3 The following are notably not deductible

a. payments of bribes within the meaning of Swiss criminal law,

b. expenses incurred to enable criminal offenses or as consideration

for the commission of criminal offenses,

c. fines and monetary penalties,

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

purpose.

4 If sanctions pursuant to para. 3 lit. 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 taxpayer credibly demonstrates that they have taken all

reasonable steps to comply with the law.

5 For the deduction of research and development expenses,

Art. 28: Tax Act (TA) Open official source

1 If items of operationally necessary fixed assets are replaced, the hidden reserves can be transferred to the replacement fixed assets acquired, provided these are also operationally necessary and located in Switzerland. Reserved remains the taxation upon replacement of real estate by items of movable assets.77

2 If the replacement acquisition does not take place in the same business year, a reserve can be formed to the extent of the hidden reserves. This reserve must be used for depreciation on the replacement object within a reasonable period or dissolved in favour of the income statement.

3 Only fixed assets that directly serve the operation are considered operationally necessary; excluded are, in particular, assets that serve the company only as an investment or only through their yield.

c. Losses § 29. 1 Losses from the seven business years preceding the tax period can be deducted, insofar as they could not be taken into account in the calculation of the taxable income of those years.

2 With contributions from third parties made to offset a deficit within the framework of a restructuring, losses that arose in earlier business years and could not yet be offset against income can also be settled.

4. Private assets

Art. 30: Tax Act (TA) Open official source

98 1 For movable private assets, the costs of administration by third

parties and foreign withholding taxes that are neither refundable nor creditable may be deducted.

2 For real estate in private assets, maintenance costs, costs of restoration of newly acquired real estate, insurance premiums, and costs of administration by third parties may be deducted. Investments serving energy saving and environmental protection, and demolition costs in view of replacement new construction, are treated as equivalent to maintenance costs, to the extent they are deductible for federal direct tax purposes.

2bis Investments and demolition costs in view of a replacement new construction according to para. 2 second sentence are deductible in the two subsequent tax periods, insofar as they cannot be fully considered for tax purposes in the current tax period in which the expenses were incurred.

Tax Law (StG)

631.1

3 Ground lease interest corresponding to income from real estate may be deducted.

4 Furthermore, costs for monument preservation works undertaken by the taxpayer based on legal provisions, in agreement with the authorities, or upon their order, are deductible, to the extent these works are not subsidized.

5 The taxpayer may claim a lump-sum deduction for real estate in private assets instead of the actual costs and premiums. The Department of Finance regulates this lump-sum deduction.

Art. 31: Tax Act (TA) Open official source

Abs. 1 lit. k remains reserved.

14

III. Determination

of Net

Income

1. Principle

2. Dependent

Employment

Tax Law (StG)

631.1

2 For professional expenses according to para. 1 lit. a–c, the Department of Finance

sets flat rates. In the case of para. 1 lit. a and c, the taxpayer

is allowed to prove higher costs; the maximum amount according to

para. 1 lit. a remains reserved.

Art. 32 : Tax Act (TA) Open official source

From the income, the following shall further be deducted

a.37 the illness and accident costs of the taxpayer and of persons

maintained by them, to the extent that the taxpayer bears the

costs themselves and these exceed 5 percent of the taxable income

reduced by the expenses according to §§ 26–31,

b.49 voluntary payments of money and other assets

to the Confederation and its institutions, to Cantons and their

institutions, to municipalities and their institutions, and to other legal

entities with their seat in Switzerland, which are exempt from

taxation with regard to public or exclusively charitable purposes,

if the donations in the tax period reach CHF 100 and

do not exceed a total of 20 percent of the taxable income

reduced by the expenses according to §§ 26–31.

Art. 33: Tax Act (TA) Open official source

The remaining costs and expenses are not deductible, in particular

a. expenses for the maintenance of the taxpayer and their family, as well as private expenses incurred due to the taxpayer's professional position,

b. ...82

c. expenses for debt repayment,

d. expenses for the acquisition, production, or enhancement in value of assets,

e. income, real estate gains, transfer of ownership, and wealth taxes of the Confederation, cantons, and municipalities, and similar foreign taxes.

Art. 34 : Tax Act (TA) Open official source

65 1 For the calculation of tax IV. Social Deductions

, the following amounts shall be deducted from net income

a. 1,109 as a child deduction

for minor children under parental care

or the taxpayer's custody, and for adult

children who are in initial vocational training

and whose maintenance is primarily provided

by the taxpayer,

each CHF 9,300

In the case of parents who are not jointly taxed,

the child deduction shall be divided equally if the

child is under joint parental care

and no maintenance contributions under § 31 para. 1

lit. c are claimed for the child.

b. Deductions

Dependent on

the Level of

Income

6. Non-

Deductible

Costs and

Expenses

1. 1. 25-127

19

631.1

Tax Law (StG)

b. 109 as a support deduction

for persons incapable of earning income or with limited

earning capacity, whose maintenance the taxpayer

contributes to at least the amount of the deduction,

This deduction cannot be claimed for

the spouse and for children for whom a deduction

under lit. a or § 31 para. 1 lit. c is granted.

each CHF 2,800

2 The social deductions according to paragraph 1 shall be determined based on the circumstances

at the end of the tax period or tax liability.

3 In the case of partial tax liability, the social deductions according to paragraph 1

shall be granted proportionally. For the determination of the tax rate, they shall be fully taken into account.98

Art. 35: Tax Law (TL) Open official source

1 The income tax amounts to (basic tariff)

0% for the first

2% for the next

3% for the next

4% for the next

5% for the next

6% for the next

7% for the next

8% for the next

9% for the next

10% for the next

11% for the next

12% for the next

13% for income parts exceeding

Fr. 6 900

Fr. 4 900

Fr. 4 800

Fr. 7 900

Fr. 9 600

Fr. 11 000

Fr. 12 900

Fr. 17 400

Fr. 33 600

Fr. 33 200

Fr. 52 700

Fr. 68 400

Fr. 263 300

2 For spouses living in a legally and factually undivided marriage, as well as for widowed, legally or factually separated, divorced, and single taxpayers who live with children in the sense of

Art. 36: Tax Act (TA) Open official source

If capital payments for recurring benefits are part of the income, the income tax shall be calculated, taking into account the remaining income, at the tax rate that would result if an equivalent annual benefit were paid instead of the lump-sum payment.

Art. 37: Tax Act (TA) Open official source

1 Capital payments according to § 22, as well as payments upon death and for permanent physical or health disadvantages, shall be calculated separately at the tax rate that would apply if, instead of a lump-sum payment, an annual payment of one-twentieth of the capital payment were made; the simple state tax shall, however, amount to at least 2 percent. A full annual tax shall always be levied.106

2 The social deductions according to § 34 shall not be granted.

Art. 37a: Tax Act (TA) Open official source

48 1 For small employment incomes from dependent 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 prerequisite is that employers pay the tax within the framework of the simplified accounting procedure according to Articles 2 and 3 of the Federal Act against Undeclared Work of June 17, 200522. This covers the income taxes of the canton and municipalities.

2 The taxes are to be periodically remitted to the competent OASI equalization fund. This fund provides the taxpayer with a statement or confirmation of the tax deduction. It transfers the collected tax payments to the cantonal tax office. The OASI equalization fund receives a collection commission. The provisions of

Art. 37b : Tax Act (TA) Open official source

76 1 If self-employment is definitively given up after reaching the age of 55 or due to inability to continue because of invalidity, the sum of the hidden reserves realized in the last two business years shall be taxed separately from other income. Purchase contributions in accordance with § 31 para. 1 lit. d are deductible. If no such purchases are made, the amount of realized hidden reserves for which the taxpayer proves the admissibility of a purchase in accordance with § 31 para. 1 lit. d shall be taxed as a capital payment in accordance with § 37. The remaining amount of the realized hidden reserves shall be taxed separately, but also in accordance with § 37.

2 Paragraph 1 also applies to the surviving spouse, other heirs, and legatees, provided that they do not continue the acquired business. The tax settlement shall take place no later than five calendar years after the end of the testator's year of death.

C. Wealth Tax

gen.

Art. 38 : Tax Act (TA) Open official source

1. The entire net worth is subject to wealth tax.

2. Usufruct assets are attributed to the usufructuary.

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

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

Art. 39: Tax Act (TA) Open official source

1 Assets are valued at their fair market value.

2 Intangible assets and movable assets belonging to the business

assets of the taxpayer are valued at the amount relevant for income tax.77

3 The Government Council issues the service instructions necessary

for a uniform valuation of real estate. A schematic, formula-based

valuation may be provided, however, due consideration must be given

to the quality characteristics of the real estate, which would also

significantly influence the purchase price in the event of a sale. The

formula must be chosen so that estimates at the upper end of the range

do not exceed the effective market value.32

22

Tax Law (StG)

631.1

4 If, in individual cases, the formula-based valuation nevertheless leads

to a higher wealth tax value, an individual appraisal must be carried

out, aiming for a value of 90 percent of the effective market value.31

Art. 39a : Tax Act (TA) Open official source

69 Employee Participations

1. Employee participations according to § 17b para. 1 are to be valued at the market value for employees (III. Employee Market Value). Any lock-up periods are to be taken into account in accordance with § 17b para. 2.

2. Employee participations according to §§ 17b para. 3 and 17c are to be declared without tax value upon allocation.

Art. 40: Tax Act (TA) Open official source

IV.70 Agricultural

Land used for agricultural or forestry purposes, including necessary buildings, shall be valued at its capitalized earning capacity.

Land

V.70 Supplementary

Art. 41: Tax Law (TL) Open official source

a. Supplementary Wealth Tax for Agricultural Land

1. Tax Liability

If a property, which has been valued at its earnings value, is

sold in whole or in part, or alienated from its previous agricultural

or forestry management, a supplementary wealth tax will be levied

on the owner.

2. Deferral of

Art. 42: Tax Act (TA) Open official source

The supplementary wealth tax shall be deferred in the case of

a. Change of ownership due to inheritance (succession, division of estate, legacy), advance on inheritance or donation,

b.30 Transfers of ownership between spouses in connection with matrimonial property law, as well as for the compensation of extraordinary contributions made by one spouse to the maintenance of the family (Art. 165 Swiss Civil Code) and claims arising from divorce law, provided both spouses agree,

c. Land consolidation for the purpose of merging properties, district planning, boundary adjustments, rounding off agricultural holdings, as well as land consolidation in expropriation proceedings or in view of impending expropriation,

d. Full or partial sale of an agricultural or forestry property, provided the proceeds are used within a reasonable period for the acquisition of a self-cultivated replacement property or for the improvement of one's own self-cultivated agricultural or forestry properties within the canton.

Art. 43: Tax Act (TA) Open official source

1 The supplementary wealth tax is levied according to the 3rd tax

period of ownership, but for a maximum of 20 years. If the assessment calculation

has been deferred, § 219 paras. 2–5 apply mutatis mutandis.

1. 1. 25-127

23

631.1

Tax Act (TA)

2 The taxable wealth is calculated as the difference between the

average of the capitalized earnings values and the average of the actual

market values of the property, each at the beginning and at the end of the relevant

period of ownership.

3 The supplementary wealth tax is levied at a tax rate

of 1 per mille and at the tax rate applicable in the year of sale or

termination of agricultural or forestry use.

4. Procedure

Art. 44: Tax Act (TA) Open official source

The supplementary wealth tax is assessed in a special procedure independent of the ordinary assessment procedure.

VI.70 Life and Annuity Insurance

Art. 45: Tax Act (TA) Open official source

75 Life insurances are subject to wealth tax at their surrender value. Redeemable annuity insurances are treated in the same way.

VII.70 Deduction of Debts

Art. 46: Tax Act (TA) Open official source

Debts for which the taxpayer is solely liable are fully deducted; other debts, such as joint and several liabilities and suretyship debts, only to the extent that they must be borne by the taxpayer.

VIII.70 Tax Tariff

Art. 47: Tax Law (TL) Open official source

1 The wealth tax amounts to (basic rate):109

0%

for the first

1/2% for the next

1%

for the next

11/2% for the next

2% for the next

21/2% for the next

3%

for parts of assets exceeding

CHF 80,000

CHF 238,000

CHF 399,000

CHF 636,000

CHF 956,000

CHF 953,000

CHF 3,262,000

2 For spouses living in legally and actually undivided marriage, as well as for widowed, judicially or actually separated, divorced, and single taxpayers who live with children within the meaning of

Art. 48: Tax Act (TA) Open official source

67 1 The effects of cold progression are compensated by a uniform Compensation

adjustment of the general deductions according to § 31, the social of Cold

deductions according to § 34, and the tax tariff steps according to §§ 35 Progression

and 47. The amounts shall be rounded up or down.

2 The Department of Finance shall adjust the deductions and tax tariff

steps at the beginning of each tax rate period to the national consumer

price index. The index level in May before the start of the tax rate

period is decisive. In the event of negative inflation, no adjustment

shall be made. The compensation following a negative inflation shall

be based on the last compensation.

E. Temporal Assessment

Art. 49: Tax Act (TA) Open official source

1 Taxes on income and wealth are assessed and levied for each tax period.

2 The calendar year is considered the tax period.

3 If tax liability exists for only part of the tax period, the tax is levied on the income earned during that period. The tax rate for regularly flowing income is determined by the income calculated for twelve months; income that does not flow regularly is not converted for the purpose of determining the rate. § 37 remains reserved.

4 For deductions, paragraph 3 applies mutatis mutandis.

Art. 50: Tax Act (TA) Open official source

1 Taxable income is calculated based on income received in the tax period.

II. Assessment

period

1. 1. 25-127 25

631.1

Tax Law (StG)

III. Wealth

taxation

IV. Majority;

Establishment

and Dissolution

of Marriage63

V. Tax rates

2 For the determination of income from self-employment, the result of the financial statements falling within the tax period is decisive.

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

Art. 51: Tax Law (TL) Open official source

1 Taxable wealth is determined by its value at the end of the tax period or the tax liability.

2 For taxpayers with independent professional activity, whose business year does not coincide with the calendar year, the taxable business wealth is determined by the equity at the end of the business year concluded within the tax period.

3 If the tax liability exists only for part of the tax period, the tax corresponding to this period shall be levied.

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

Art. 52: Tax Act (TA) Open official source

1 Taxable persons shall, for the first time for the tax period in which they come of age, be assessed independently. This is subject to an independent assessment insofar as they derive earned income or are not under parental custody.63

2 In the case of marriage, spouses shall be taxed jointly for the entire tax period.84

3 In the case of divorce and legal or de facto separation, each spouse shall be taxed separately for the entire tax period.

4 In the case of the death of a spouse, the spouses shall be taxed jointly until the date of death. The death shall be considered the termination of the tax liability of both spouses and the commencement of the tax liability of the surviving spouse.

Art. 53: Tax Act (TA) Open official source

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

26

Tax Law (StG)

Third Section: Taxation of Legal Entities

A. Tax Liability

Art. 54: Tax Law (TL) Open official source

¹ The following are taxed as legal entities

a. corporations (public limited companies, partnerships limited by shares, limited liability companies) and cooperatives,

b. associations, foundations and other legal entities.

² Collective investment schemes with direct real estate holdings pursuant to Art. 58 CISA are treated in the same way as other legal entities. Investment companies with fixed capital pursuant to Art. 110 CISA are taxed as corporations.

³ Foreign legal entities, as well as foreign trading companies and other foreign associations of persons without legal personality taxable in accordance with § 8 para. 2, are treated in the same way as domestic legal entities to which they are legally or factually most similar.

Art. 55: Tax Act (TA) Open official source

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

**Art. 56 : Tax Act (TA)** Open official source

¹ Legal entities with registered office or actual administration outside the canton are subject to tax if they

a. are partners in businesses within the canton,

b. maintain permanent establishments within the canton,

c. own property, have real rights, or personal rights economically equivalent thereto, in real estate within the canton,

d.97 trade in real estate located within the canton.

² Legal entities with registered office and actual administration abroad are furthermore subject to tax if they

a. are creditors or beneficiaries of claims secured by mortgage or pledge on real estate within the canton,

b.98 act as intermediaries for real estate located within the canton.

Art. 57: Tax Law (TL) Open official source

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

1. 1. 25-127

631.1

I. Definition

of Legal

Person

II. Tax

Affiliation

1. Personal

Affiliation

2. Economic

Affiliation

3. Scope of

Tax Liability

27

631.1

Tax Act (TA)

² In the case of economic affiliation, tax liability is limited to those parts of the profit and capital for which a tax liability exists in the canton according to § 56.

³ The demarcation of tax liability for businesses, permanent establishments, and real estate in relation to other cantons and abroad is based on the principles of federal law regarding the prohibition of intercantonal double taxation. A Swiss enterprise may offset losses from a foreign permanent establishment against domestic 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 following seven financial years, taxation shall occur in those financial years to the extent of the loss carryforwards offset in the state of the permanent establishment. Losses from foreign real estate can only be taken into account if a permanent establishment is also maintained in the country concerned. Regulations contained in double taxation agreements remain reserved. 98

⁴ Taxpayers without a registered office or actual administration in Switzerland must pay tax on the profit earned in the canton and the capital located in the canton.98

**Art. 58 : Tax Act (TA)** Open official source

99

III. Commencement

and Termination of Tax Liability

Art. 59: Tax Act (TA) Open official source

1 **Commencement and Termination of Tax Liability**

1 Tax liability commences with the establishment of the legal

entity, with the relocation of its domicile or its effective

management to the canton, or with the acquisition of assets

taxable in the canton.

2 Tax liability ceases with the conclusion of the liquidation, with

the relocation of the domicile or effective management from the

canton, or with the cessation of assets taxable in the canton.

3 If a legal entity transfers assets and liabilities to another

legal entity, the taxes owed by the former shall be paid by

the acquiring legal entity.

4 The consequences of the commencement, change, and termination of tax

liability based on personal and economic affiliation in intercantonal

relations are determined by the Federal Act on the Harmonisation of Direct

Taxes of Cantons and Municipalities19 as well as by the principles of federal law

on the prohibition of intercantonal double taxation.29

28

Tax Act (TA)

631.1

Art. 60: Tax Act (TA) Open official source

1. **IV. Joint and Several Liability**

When the tax liability of a legal entity ceases, the persons entrusted with its management and those entrusted with its liquidation are jointly and severally liable for the taxes owed by it up to the amount of the liquidation proceeds or, if the legal entity transfers its registered office or effective management abroad, up to the amount of the net assets of the legal entity. Liability is excluded if the liable person proves that they have exercised all due diligence required by the circumstances.

2. For the taxes of a legal entity taxable on the basis of economic affiliation, the following persons are jointly and severally liable up to the amount of the net proceeds

a. persons who dissolve businesses or permanent establishments in the canton;

b. persons who dispose of or realize real estate in the canton or claims secured by such real estate.

3. The buyer and seller of a property located in the canton are jointly and severally liable for taxes owed from brokerage activities up to 3 percent of the purchase price if the legal entity brokering the property has neither its registered office nor its effective management in Switzerland; however, the buyer and seller are only jointly and severally liable insofar as they have given a corresponding mandate to a legal entity with its registered office abroad.

4. For taxes of foreign commercial companies and other foreign associations of persons without legal personality, the partners are jointly and severally liable.

Art. 61: Tax Act (TA) Open official source

V. Exceptions

from Tax

Liability

1. 1. 25-127

29

631.1

Exempt from tax liability are

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

b. the Canton and its institutions,

c.45,52 the religious corporations recognized by the Constitution2 as well as the Jewish communities recognized by the Constitution2,

d. the municipalities of Zurich and their institutions,

e. institutions for occupational retirement provision of companies with domicile, seat, or permanent establishment in Switzerland and of related companies, provided that the assets of the institution are permanently and exclusively used for staff pension schemes,

f. domestic social insurance and equalization funds, in particular unemployment, health insurance, old age, disability, and survivors' insurance funds, with the exception of licensed insurance companies,

g. legal entities pursuing public or charitable purposes, for the profit and capital exclusively and irrevocably dedicated to these purposes. Entrepreneurial purposes are generally not charitable. The acquisition and management of significant equity participations in companies are considered charitable if the interest in the preservation of the company is subordinate to the charitable purpose and no management activities are exercised,

h. political parties represented in the Cantonal Council,

i. legal entities pursuing cultic purposes at the cantonal or national level, for the profit and capital exclusively and irrevocably dedicated to these purposes,

j. foreign states for their real estate exclusively intended for the direct use of diplomatic and consular representations, subject to reciprocity,

k.48 collective investment schemes with direct real estate holdings, provided that their investors are exclusively tax-exempt institutions for occupational retirement provision according to lit. e or tax-exempt domestic social insurance and equalization funds according to lit. f,

l.71 transport and infrastructure companies licensed by the Confederation, which receive compensation for this activity or must maintain a year-round operation of national importance based on their concession; the tax exemption also extends to profits from the licensed activity that are freely available; however, ancillary businesses and real estate that have no necessary relation to the licensed activity are excluded from the tax exemption.

VI. Tax

Relief

for Companies

Art. 62: Tax Act (TA) Open official source

For enterprises of legal entities newly established

and serving the economic interest of the Canton, the

Government Council, in agreement with the competent

municipality, may grant appropriate tax relief for a maximum of the opening year and the nine subsequent

years. A substantial change in business activity can be equated with a new establishment.

30

Tax Law (StG)

B. Profit Tax

Art. 63 : Tax Act (TA) Open official source

The object of profit tax is net profit.

631.1

1. Taxable Object

1. Principle

2. Calculation

of Net Profit

Art. 64: Tax Act (TA) Open official source

1 The taxable net profit is comprised of

the balance of the profit and loss account, taking into account the

balance carried forward from the previous year;

all parts of the business result excluded before calculating the balance

of the profit and loss account that are not used to cover

commercially justified expenses,

such as in particular

a. costs for the acquisition, production, or value enhancement

of fixed assets,

b. commercially unjustified depreciation and provisions,

c. contributions to reserves,

d. payments to equity from the funds of the legal entity,

insofar as they do not come from reserves taxed as profit,

e. open and hidden profit distributions and commercially

unjustified grants to third parties;

3.93 income not credited to the profit and loss account, including

capital, revaluation, and liquidation gains, subject to § 68;

4. interest on hidden equity (§ 80);

5.77 no longer commercially justified depreciation and

value adjustments on the acquisition costs of participations

within the meaning of § 72a para. 1.

2 The taxable net profit of legal entities that do not prepare a profit and

loss account is determined mutatis mutandis according to para. 1.

3 Gains on real estate are taxable as profit to the extent that the acquisition

price and value-enhancing expenses, including construction loan interest,

exceed the profit tax value.

a. General

Art. 64a : Tax Act (TA) Open official source

92 1 The following shall be considered patents

b. Patents and

comparable

rights: definitions

a. Patents under the European Patent Convention of October 5, 197328 in its revised version of November 29, 2000, designating Switzerland,

b. Patents under the Patent Act of June 25, 195414,

c. Foreign patents corresponding to patents under lit. a or b.

1. 1. 25-127

31

c. Patents and

comparable

rights

taxation

631.1

2 The following shall be considered comparable rights

Tax Law (StG)

a. Supplementary protection certificates under the Patent Act of June 25, 195414 and their extensions,

b. Topographies protected under the Topographies Act of October 9, 199213,

c. Plant varieties protected under the Plant Variety Protection Act of March 20, 197515,

d. Documentation protected under the Therapeutic Products Act of December 15, 200021,

e. Reports for which report protection exists based on implementing provisions for the Agriculture Act of April 29, 199825,

f. Foreign rights corresponding to rights under lit. a–e.

Art. 64b : Tax Act (TA) Open official source

92 1 The net profit from patents and comparable rights, upon application

by the taxable person, shall be included in the calculation of the

taxable net profit with a reduction of 90 percent, in proportion

to the qualifying research and development expenditure to the

total research and development expenditure per patent or

comparable right (Nexus Ratio).

2 The net profit from patents and comparable rights contained in

products shall be determined by reducing the net profit from

these products by 6 percent of the costs allocated to these products

and by the trademark royalty, respectively.

3 In the year of introduction of patents and comparable rights into

taxation according to para. 1, and in the four subsequent years,

the net profits determined according to para. 1 shall first be offset

against the research and development expenditure incurred for these

rights until their introduction and tax-effectively deducted, as well as

with expenditures according to

Art. 64c : Tax Law (TL) Open official source

1. **Disclosure upon Commencement of Tax Liability**

If the taxable person discloses hidden reserves, including self-created goodwill, at the commencement of tax liability, these are not subject to profit tax. Hidden reserves of a corporation or cooperative arising from participations of at least 10 percent in the share capital or equity or in the profit and reserves of another company may not be disclosed.

2. The commencement of tax liability is deemed 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 according to § 61, as well as the transfer of the registered office or the actual administration to Switzerland.

3. The disclosed hidden reserves shall be depreciated annually at the rate that is applied for tax purposes to depreciation on the respective assets.

1. 1. 25-127

33

631.1 Tax Act (StG)

4. The disclosed self-created goodwill shall be depreciated within ten years.

e. Taxation

of hidden reserves

at the end of

tax liability

f. Business-

justified expenditure 93

Art. 64d : Tax Act (TA) Open official source

92 Capital Gains Tax upon Termination of Tax Liability

1 If tax liability terminates, the untaxed hidden reserves existing at that time, including self-created goodwill, shall be subject to tax.

2 The termination of tax liability shall be deemed to occur upon the transfer of assets, businesses, parts of businesses, or functions from Switzerland to a foreign business operation or a foreign permanent establishment, the transition to a tax exemption according to § 61, or the relocation of the seat or actual management abroad.

Art. 65: Tax Act (TA) Open official source

112 1 The following also qualify as commercially justified expenses

a. federal, cantonal, and communal taxes,

b. contributions to provident institutions for the benefit of the company’s own personnel, provided that any misuse is excluded,

c.49 voluntary payments of money and other assets up to 20 percent of the net profit to the Confederation and its institutions, to cantons and their institutions, to municipalities and their institutions, and to other legal entities with their seat in Switzerland that are exempt from tax liability for public or exclusively charitable purposes,

d. rebates, discounts, sales bonuses, and refunds on the consideration for supplies and services, as well as surpluses of insurance companies intended for distribution to policyholders,

e. reserves for future research and development contracts with third parties up to 10 percent of the taxable profit, but in total no more than 1 million Swiss francs,

f.80 the costs of professional education and training, including retraining costs, for the company’s own personnel,

g. profit-skimming sanctions, insofar as they do not have a punitive purpose.

2 The following do not, in particular, qualify as commercially justified expenses

a. payments of bribes within the meaning of Swiss criminal law,

b. expenses to facilitate criminal acts or as consideration for the commission of criminal acts,

c. fines,

Tax Law (StG)

631.1

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

3 If sanctions under para. 2 lit. c and d have been imposed by a foreign criminal or administrative authority, they are deductible if

a. the sanction violates Swiss public policy (ordre public) or

b. the taxpayer credibly demonstrates that they took all reasonable steps to comply with the law.

Art. 65a : Tax Act (TA) Open official source

applicable by analogy.92

b. Replacement procurements

Art. 65b : Tax Act (TA) Open official source

92 1** Business-related expenses also include the deduction for equity financing. The deduction corresponds to the notional interest on security equity.

**2** Security equity corresponds to the portion of taxable equity in Switzerland before a reduction under § 81a that exceeds the equity required long-term for business operations. It is calculated using equity allocation rates, which are graded according to the risk category of the assets.

**3** Notional interest is excluded on

a. Participations under § 72,

b. Non-operating assets,

c. Assets under § 64a.

d. Undeclared reserves disclosed under § 64c, including self-created added value, as well as comparable untaxed disclosed undeclared reserves,

e. Assets related to transactions that result in an unjustified tax saving, particularly receivables of all kinds from related parties, insofar as these originate from the sale of participations under §§ 72 and 72a or distributions.

**4** The notional interest rate on security equity is based on the yield of ten-year federal bonds. Insofar as this is proportionately attributable to receivables of all kinds from related parties, an interest rate corresponding to an arm's length comparison may be claimed; para. 3 lit. e remains reserved.

**5** The calculation of the notional interest on security equity is made at the end of the tax period on the basis of the average value of the individual assets, valued at profit tax values, and the equity during the respective tax period, as well as the equity allocation rates pursuant to paras. 2 and 3 and the provisions regarding the notional interest rate pursuant to para. 4.

**6** For the application of paras. 2–5, the implementing provisions issued by the Federal Council based on Art. 25abis para. 6 of the Federal Act on the Harmonisation of Direct Taxes of Cantons and Municipalities19 apply.

***

**1. 1. 25-127**

g. Additional deduction for research and development expenses

h. Deduction for equity financing

**35**

**631.1 Tax Act (StG)**

Art. 65c : Tax Act (TA) Open official source

92** **1** The entire tax reduction according to §§ 64 b para. 1 and 2 as well as 65 a and 65 b may not exceed 70 percent of the taxable profit before loss offset, whereby the net participation income according to §§ 72 and 72 a is excluded, and before deduction of the reductions made.

**2** Neither from the individual reductions nor from the entire tax relief may loss carry-forwards result.

Art. 66: Tax Act (TA) Open official source

No taxable gain arises from

a. Capital contributions by members of capital companies and co-

operatives, including agio and contributions à fonds perdu,

b. Relocation of the seat, management, a business operation or a

permanent establishment within Switzerland, provided that no sales

or book value revaluations are made,

c. Capital growth from inheritance, legacy or gift.

36

Tax Act (StG)

631.1

Art. 67 : Tax Act (TA) Open official source

39 1 **Hidden Reserves of a Legal Entity in the Event of Restructuring**

Hidden reserves of a legal entity are not taxed in the event of restructurings, particularly in the case of merger, demerger, or transformation, provided that the tax liability in Switzerland continues to exist and the values previously decisive for profit tax are adopted

a. upon transformation into a sole proprietorship or partnership or another legal entity;

b. upon spin-off or split-off of a legal entity, provided that one or more businesses or parts of businesses are transferred and to the extent that the legal entities existing after the split-off continue to operate a business or part of a business;

c. upon the exchange of equity or membership rights in connection with restructurings or merger-like combinations;

d. upon the transfer of businesses or parts of businesses, as well as items of operational fixed assets, to a domestic subsidiary. A subsidiary is defined as a corporation or cooperative in which the transferring corporation or cooperative holds at least 20 percent of the share capital or basic capital.

2 In the event of a transfer to a subsidiary according to paragraph 1 letter d, the transferred hidden reserves are subsequently taxed in the subsequent tax assessment procedure according to §§ 160–162, to the extent that during the five years following the restructuring, the transferred assets or equity or membership rights in the subsidiary are alienated; in this case, the subsidiary may claim corresponding hidden reserves taxed as profit.

3 Directly or indirectly held participations of at least 20 percent of the share capital or basic capital of another corporation or cooperative, businesses or parts of businesses, as well as items of operational fixed assets, may be transferred between domestic corporations and cooperatives which, based on the overall picture of the actual circumstances, are consolidated under the uniform management of a corporation or cooperative by a majority of votes or in another way, at the values previously decisive for profit tax. The transfer to a subsidiary according to paragraph 1 letter d remains reserved.

4 If, in the case of a transfer according to paragraph 3, the transferred assets are alienated during the subsequent five years or if the uniform management is abandoned during this period, the transferred hidden reserves are subsequently taxed in the subsequent tax assessment procedure according to §§ 160–162. In this case, the favored legal entity may claim corresponding hidden reserves taxed as profit. The domestic corporations and cooperatives consolidated under uniform management at the time of the violation of the blocking period are jointly and severally liable for the subsequent tax.

5 If, by the assumption of the assets and liabilities of a corporation or a cooperative whose equity rights belong to the acquiring corporation or cooperative, a book loss arises on the participation, this cannot be deducted for tax purposes; any book gain on the participation shall be taxed.

Art. 68: Tax Act (TA) Open official source

1 If items of operationally necessary fixed assets are replaced, the hidden reserves can be transferred to the acquired replacement fixed assets, provided these are also operationally necessary and located in Switzerland. The taxation remains reserved when replacing real estate with movable assets.77

2 When replacing participations, the hidden reserves can be transferred to a new participation, provided the disposed participation amounted to at least 10 percent of the share or ordinary capital or at least 10 percent of the profit and reserves of the other company, and this participation was held by the corporation or cooperative for at least one year.77

3 If the replacement acquisition does not take place in the same financial year, a reserve can be formed to the extent of the hidden reserves. This reserve must be used within a reasonable period for depreciation on the replacement asset or released to the income statement.

4 Only fixed assets that directly serve the operation are considered operationally necessary; excluded are, in particular, asset objects that serve the company merely as an investment or only through their yield.

m.93 Profits

of associations,

foundations and

collective

investment schemes

Art. 69: Tax Act (TA) Open official source

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

2 From the taxable income of associations, expenses necessary for its generation can be deducted in full; other expenses can only be deducted to the extent that they exceed membership fees.

38

Tax Law (StG)

631.1

3 Collective investment schemes with direct real estate holdings are subject to profit tax on income from direct real estate.49

Art. 69a : Tax Act (TA) Open official source

87 Profits of legal entities with idealistic purposes

are not taxed, provided they do not exceed CHF 20,000 and

are exclusively and irrevocably dedicated to these purposes.

n.3 Profits

of legal

entities with

idealistic

purposes

Art. 70: Tax Act (TA) Open official source

1 From the net profit of the tax period, losses from seven business years preceding the tax period may be deducted, to the extent that they could not be taken into account in the calculation of the taxable net profit of those years.

2 Losses incurred in previous business years and not yet offset against profits may also be offset against contributions to offset an underbalance as part of a restructuring, which are not capital contributions according to § 66 lit. a.

o.93 Losses

Art. 71: Tax Act (TA) Open official source

II. Tax

Calculation

9% The profit tax for corporations and cooperatives is 7 percent of the taxable profit.

1. Corporations

and Cooperatives

Art. 72: Tax Act (TA) Open official source

Here is the English translation of the law article

1. The profit tax of a corporation or cooperative is reduced in proportion to the net income from qualifying participations to the total net profit, if the corporation or cooperative

2. Participation Relief

a. General Principle

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

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

c. holds qualifying participations with a fair market value of at least one million Swiss francs.

2 The net income from participations corresponds to the income from participations, reduced by the proportionate administrative expenses of 5 percent or by the lower actual administrative expenses, as well as by the proportionate financing expenses.

3 Financing expenses include interest on debt as well as other expenses that are economically equivalent to interest on debt. Income from a participation is not taken into account in calculating the reduction to the extent that a depreciation is made on the same participation that is related to the distribution of profit.

1. 1. 25-127

39

631.1

Tax Law (TL)

b. Capital Gains and

Revaluation Gains

4 For parent companies of systemically important banks according to

Art. 72a : Tax Act (TA) Open official source

1 The participation exemption is also granted for capital

gains on participations, proceeds from related subscription rights,

and book profits on participations as a result of revaluation in accordance with

Art. 76 : Tax Act (TA) Open official source

1. Income Tax for Associations, Foundations, and Other Legal Entities

1 The income tax for associations, foundations, and other legal entities is 4 percent of the net profit.

2 Profits that do not reach CHF 10,000 when calculated for a year are not taxed.

Art. 77: Tax Law (TL) Open official source

49 The profit tax of collective investment schemes with direct real estate holdings amounts to 4 percent of the taxable net profit.

7. Collective Investment Schemes

C. Capital Tax

Art. 78: Tax Act (TA) Open official source

The subject of capital tax is equity.

I. Tax Object

1. Principle

Art. 79: Tax Act (TA) Open official source

1. Taxable Equity consists, for capital companies and cooperatives, of

the paid-in share, basic, or common capital, the contributions, agio

and subsidies shown in the commercial balance sheet in the sense of

§ 20 para. 4, the participation capital, the disclosed reserves and

the hidden reserves formed from taxed profit.93

2. At a minimum, the paid-in share, basic, or common capital, including

the paid-in participation capital, is taxable.

a. General

Art. 80: Tax Act (TA) Open official source

The taxable equity of corporations and b. Hidden

cooperatives is increased by that part of the debt capital which, from an economic perspective, has the character of equity.

3. Associations,

Art. 81: Tax Law (TL) Open official source

1 Taxable equity capital is considered to be

a.49 for collective investment schemes, the share of net assets attributable to direct real estate foundations and;

b. for associations, foundations and other legal entities, the net assets.

2 Assets are valued according to the principles applicable to the wealth tax of natural persons.

3 In the event of the sale or diversion of agricultural or forestry properties valued at their capitalized earnings value, a supplementary capital tax at a rate of 0.75 per mille shall be levied; in all other respects, the provisions concerning the supplementary wealth tax of natural persons shall apply mutatis mutandis.33

other legal entities

Art. 81a : Tax Act (TA) Open official source

92 Regarding the taxable equity capital attributable to participation rights, 4. Reduction

rights under § 64a, and loans to group companies,

90 percent can be deducted. The deduction is calculated based on

the values authoritative for profit and capital tax.

1. 1. 25-127

41

631.1

Tax Law (StG)

II. Tax

calculation

I. Tax period

II. Assessment

of

net profit

III. Assessment

of

equity capital

IV. Tariffs and

tax rates

Art. 82: Tax Act (TA) Open official source

1 The capital tax is 0.75 per mille of the taxable equity.93

2 Equity of associations, foundations, and other legal entities, including collective investment schemes with direct real estate holdings, below CHF 100,000 is not taxed.49

D. Temporal Assessment

Art. 83: Tax Act (TA) Open official source

1 Taxes on net profit and on equity capital are assessed and levied for each tax period.

2 The business year is considered the tax period.

3 In every calendar year, except for the year of foundation, financial statements with a balance sheet and an income statement must be prepared. Furthermore, financial statements are required upon the relocation of the seat, administration, a business operation, or a permanent establishment abroad, as well as upon the conclusion of liquidation.

Art. 84: Tax Act (TA) Open official source

49

**1** The taxable net profit is determined by the result of the tax period.

**2** If the financial statements are denominated in a foreign currency, the taxable net profit must be converted into Swiss Francs. The average exchange rate (selling) of the tax period is decisive.

**3** If a legal entity is dissolved or transfers its seat, administration, business operations, or a permanent establishment abroad, the undisclosed reserves formed from untaxed profits will be taxed together with the net profit of the last financial year.

Art. 85: Tax Act (TA) Open official source

1 Taxable Equity is determined by the balance at the end of the tax period.

**2 If the financial statements are denominated in a foreign currency, the taxable equity must be converted into Swiss francs. The relevant exchange rate is the foreign exchange selling rate at the end of the tax period.**

**3 In the case of financial statements covering more or less than a year, the amount of the capital tax is determined by the duration of the business year.**

Art. 86 : Tax Act (TA) Open official source

Applicable are the tariffs and tax rates valid at the end of the tax period.

42

Tax Act (StG) 631.1

Part Four: Withholding Taxes for Natural and Legal Persons

A. Natural Persons with Tax Domicile or Residence in the Canton

Art. 87: Tax Act (TA) Open official source

101 1. Employees without a settlement permit who are domiciled or resident for tax purposes in the Canton of the Source are subject to source tax on their income from dependent employment. Excluded from this are incomes that are subject to taxation under the simplified settlement procedure according to § 37a.

2. Spouses living in a legally and factually undivided marriage are not subject to source tax if one of the spouses holds Swiss citizenship or a settlement permit.

Art. 88: Tax Act (TA) Open official source

1. **Withholding Tax on Gross Income – II. Taxable Benefits**

2. Taxable are:101

a. income from dependent employment according to § 87 para. 1, ancillary income such as monetary benefits from employee participation programs, as well as benefits in kind and tips, but not the costs of job-oriented education and training borne by the employer according to § 17 para. 2,

b. substitute income.

3. Benefits in kind and tips are generally valued according to the rates applicable to the federal old-age and survivors' insurance.

Art. 89 : Tax Law (TL) Open official source

101 1 The withholding tax deduction on taxable benefits III. Tax Rates

according to § 88 is made by applying the withholding tax rates. 1. Basis

2 The Department of Finance sets the withholding tax rates in accordance with the

tax rates and tax multipliers applicable to income tax. The same rates apply throughout the canton.

3 The withholding tax rates include state, personal, and municipal taxes, as well as the direct federal tax.

4 The share for municipal taxes is calculated based on the weighted average of municipal taxes in the canton.

Art. 90 : Tax Law (TL) Open official source

101 1 When determining tax rates, flat-rate deductions for professional

2. Design

expenses (§ 26) and insurance premiums (§ 31 para. 1 lit. d, f and g) as

well as deductions for family burdens (§§ 34 and 35) are taken into account.

1. 1. 25-127

43

631.1 Tax Law (TL)

2 The withholding tax deduction for spouses living in a legally and factually

undivided marriage, both of whom are gainfully employed, is based on

withholding tax rates that take into account their total income (§ 7 para. 1),

the flat rates and deductions according to para. 1, as well as the deduction for

gainful employment of both spouses (§ 31 para. 2).

3 The specifications issued by the Federal Tax Administration (FTA)

pursuant to Art. 33 para. 4 of the Federal Act on the Harmonization of

Direct Taxes of Cantons and Municipalities19 concerning the consideration

of 13th-month salaries, gratuities, irregular employment, hourly wages,

part-time or secondary employment, and rate-determining elements, as well as

the rules for tariff changes, retroactive salary adjustments and corrections,

and for benefits before the start and after the termination of employment, are

applicable.

Art. 92: Tax Act (TA) Open official source

Abs. 1 lit. a as well as Abs. 2 and 3 apply mutatis mutandis.

3 The Government Council regulates the distribution of tax amounts between the Canton and municipalities.

1. 1. 25-127

21

2. Special Cases

a. Capital settlements for recurring benefits

b. Capital benefits from pension schemes

VI. Simplified Accounting Procedure

631.1

Tax Law (Tax Act)

VII. Liquidation Gains

I. Tax Object

II. Valuation

Art. 93: Tax Law (TL) Open official source

101 1 Persons who are subject to withholding tax according to Article 87 paragraph 1 shall subsequently be assessed in the ordinary procedure if

a. their gross income in a tax year reaches or exceeds the amount determined by the Federal Department of Finance based on Article 33a paragraph 2 of the Federal Act on the Harmonisation of Direct Taxes of the Cantons and Municipalities19 or

b. they have assets and income not subject to withholding tax.

IV. Duties

of the debtor

of the taxable

performance

V. Subsequent

ordinary

assessment

1. Mandatory

subsequent

ordinary

assessment

44

Tax Act (TA)

631.1

2 A person living in a legally and actually undivided marriage with a person according to paragraph 1 shall also be subject to subsequent ordinary assessment.

3 Persons with assets and income according to paragraph 1 letter b must request the tax return form from the municipal tax office by March 31 of the year following the tax year.

4 The subsequent ordinary assessment applies until the end of the withholding tax obligation.

5 The tax withheld at source shall be credited without interest.

Art. 93a : Tax Act (TA) Open official source

100 1. Persons subject to withholding tax under Article 87 para. 1 2. Subsequent

and who do not meet any of the conditions under Article 93 para. 1, ordinary

shall, upon request, be subsequently assessed under the ordinary procedure. assessment

upon request

2. The request also extends to the spouse who lives in a legally and factually

undivided marriage with the applicant.

3. The request 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 subsequent ordinary assessment upon request is made, the withholding

tax shall replace the federal, cantonal, and communal taxes on earned income

to be assessed under the ordinary procedure. No additional deductions shall

be granted subsequently.

5. Article 93 paras. 4 and 5 are applicable.

B. Natural persons without tax domicile or residence in

Switzerland and legal entities without a seat or effective

management in Switzerland101

Art. 94 : Tax Act (TA) Open official source

101 1 Cross-border commuters, weekly residents, I. Employees

and short-term residents living abroad are subject to withholding tax

pursuant to §§ 88–90 for income from dependent employment earned

in the Canton. Excluded from this are incomes subject to taxation

under the simplified accounting procedure pursuant to § 37a.

2 Employees living abroad who receive wages or other remuneration

from an employer with a seat or permanent establishment in the Canton

for work in international transport on board a ship or an aircraft or

during transport by road are also subject to withholding tax pursuant

to §§ 88–90; excluded from this remains the taxation of seafarers for

work on board a high-seas vessel.

1. 1. 25-127

45

631.1

Tax Act (StG)

II. Artists,

Athletes and

Lecturers

III. Directors

IV. Mortgage

Creditors

Art. 95: Tax Act (TA) Open official source

101 1 Artists residing abroad, such as stage, film, radio or television artists, musicians and performers, as well as athletes and lecturers, are subject to tax on income derived from their personal activities carried out in the canton and on other related remunerations. This also applies to income and remunerations that accrue not to the artist, athlete or lecturer themselves, but to a third party who organized their activity.

2 The tax amounts to 10 percent of the taxable benefits.

3 Taxable benefits are gross income, including all allowances and ancillary benefits, after deduction of acquisition costs. These amount to

a. 50 percent of gross income for artists,

b. 20 percent of gross income for athletes and lecturers.

4 The organizer entrusted with the organization of the performance in the canton is jointly and severally liable for the tax.

5 The withholding tax is not levied if the gross income does not reach the amount stipulated by the Federal Department of Finance based on Art. 92 para. 5 of the Federal Act on Direct Federal Tax.

Art. 96 : Tax Act (TA) Open official source

1. Members of the board of directors or management of legal entities with a registered office or actual administration in the Canton who reside abroad are subject to tax on the tantièmes, attendance fees, fixed remunerations, employee participations, and similar payments they receive. This also applies if these payments flow to a third party.

2. Members of the board of directors or management of foreign companies with permanent establishments in the Canton who reside abroad are subject to tax on the tantièmes, attendance fees, fixed remunerations, employee participations, and similar payments they receive at the expense of these permanent establishments.

3. The tax amounts to 20 percent of the gross income.

Art. 97: Tax Act (TA) Open official source

1 Creditors or beneficiaries residing abroad of claims that are secured by real estate or chattel mortgages on properties located in the canton are subject to tax on the interest paid to them.

2 Legal entities without a seat or actual administration in Switzerland are also considered creditors or beneficiaries.

3 The tax amounts to 14 percent of the gross income.

46

Tax Law (StG)

631.1

Art. 98: Tax Act (TA) Open official source

30 1 Recipients residing abroad who receive pensions, retirement V. Recipients

salaries, or other emoluments based on a former public-law of Pension

employment relationship from an employer or a pension fund Benefits from

domiciled in the Canton are subject to tax on these benefits. Public-Law

Employment

2 The tax amounts to 6 percent of the gross income.

Art. 99: Tax Act (TA) Open official source

1 Recipients residing abroad of benefits from private occupational pension schemes or from recognized forms of restricted private provision with their seat or establishment in the canton are liable to tax thereon.

2 The tax amounts to 6 percent of the gross income.

Art. 100: Tax Act (TA) Open official source

103 1 Individuals who, at the time of the inflow of monetary VII. Recipients

benefits from restricted employee options (Art. 17b para. 3), are of Employee

resident abroad, will be proportionally taxable on the monetary Participations

benefit in accordance with Art. 17d.

2 The tax amounts to 20 percent of the monetary benefit.

Art. 101: Tax Act (TA) Open official source

101 The tax deduction according to §§ 95–100 is increased by the rates for direct federal tax corresponding to VIII. Direct Federal Tax.

Art. 101a : Tax Act (TA) Open official source

100 1 Persons who are subject to withholding tax under Article 94, IX. Subse-

quent ordinary assessment

may apply for a subsequent ordinary assessment for each tax period until March 31 of the year following the tax year, if

a. the predominant part of their worldwide income, including the income of their spouse, is taxable in Switzerland,

b. their situation is comparable to that of a taxpayer resident 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 shall be credited without interest.

Subsequent Ordinary Assessment upon Request

Art. 101b : Tax Act (TA) Open official source

100 1 In conflicting situations, particularly concerning subsequent ordinary assessments where lump-sum deductions are included in the withholding tax rate, the cantonal tax office may, ex officio, conduct a subsequent ordinary assessment in favor of or to the detriment of the taxpayer.

2 The tax deducted at source shall be credited without interest.

Art. 101c : Tax Act (TA) Open official source

100 If no subsequent ordinary assessment XI. Tax Paid

is made under §§ 101a and 101b, the withholding tax replaces the taxes

on earned income to be assessed in the ordinary procedure. No

additional deductions are granted.

1. 1. 25-127

47

631.1

Tax Law (StG)

XII. Obligations

of the Debtor

of the Taxable

Benefit

a.

XIII. Distribution

of the Tax

Art. 102: Tax Act (TA) Open official source

1. The debtor of the taxable performance is obliged,

a. in the case of monetary payments, to withhold the tax due at maturity and, in the case of other performances (in particular benefits in kind and tips), to collect the tax due from the taxpayer,

b. to issue a statement or confirmation of the tax deduction to the taxpayer,

c. to remit the taxes periodically to the tax office of the assessment municipality in accordance with § 109, to settle accounts with it, and to grant it access to all documents for the purpose of controlling tax collection,

d.69 to pay the pro rata taxes on employee options exercised abroad; the employer owes the pro rata tax even if the pecuniary advantage is paid by a foreign group company.

2. The tax deduction must also be made if the creditor of the taxable performance is subject to tax in another canton.

3. The debtor of the taxable performance is liable for the payment of the withholding tax.

4. They receive a collection commission of 1–2 percent of the total withholding tax amount. The Department of Finance shall determine the collection commission. For capital payments, the collection commission amounts to 1 percent of the total withholding tax amount, but a maximum of CHF 50 per capital payment for the withholding tax of the Confederation, canton, and municipality.101

Art. 103: Tax Act (TA) Open official source

70 1 The tax amount resulting in accordance with §§ 95–99 shall be allocated,

two-fifths to the Canton and three-fifths to the political municipality.

2 The Department of Finance shall regulate the distribution of the tax amount in accordance with

Art. 104: Tax Act (TA) Open official source

101 1 The debtor of the taxable benefit calculates and

levies withholding tax as follows

a. for employees according to § 87: according to the law of the canton in which

the employee has his tax domicile or residence at the time the taxable benefit becomes due,

48

Tax Act (TA)

631.1

b. for persons according to §§ 94 and 96–100: according to the law of the canton

in which the debtor of the taxable benefit has his tax domicile or

residence or his seat or administration at the time the taxable benefit becomes due; if the taxable

benefit is paid by a permanent establishment in another canton or by

the permanent establishment of an enterprise without a seat or actual

management in Switzerland, the calculation

and collection of withholding tax shall be governed by the law of the canton

in which the permanent establishment is located,

c. for persons according to § 95: according to the law of the canton in which the

artist, athlete, or speaker carries out their activity.

2 If the employee according to § 94 is a weekly resident, para. 1

lit. a applies mutatis mutandis.

3 The debtor of the taxable benefit transfers the withholding

tax to the canton entitled thereto according to paras. 1 and 2.

4 Jurisdiction for the subsequent ordinary assessment

is governed by Art. 38 para. 4 of the Federal Act on the Harmonisation

of Direct Taxes of the Cantons and Municipalities.

Art. 105: Tax Law (TL) Open official source

102

Part Five: Procedural Law

A. Tax Administration Authorities

Art. 106: Tax Act (TA) Open official source

### 1 Implementation Authorities

1 Unless specific authorities are designated, the implementation of this Act shall be incumbent, in the canton, upon the Cantonal Tax Office, and in the municipalities, upon the Municipal Tax Office.

2 The organization of the Cantonal Tax Office, including the competencies of tax commissioners, auditors, legal secretaries, and other employees of the Cantonal Tax Office, shall be regulated by the Government Council, while the organization of the Municipal Tax Office shall be regulated by the municipality.

3 The Municipal Executive Board shall determine who may file objections, appeals, or complaints on behalf of the municipality.

Art. 107 : Tax Act (TA) Open official source

1 The Cantonal Tax Office carries out the assessment.

2 The Municipal Tax Offices are obliged to cooperate in the assessment. The Department of Finance issues directives stating in which cases the Municipal Tax Offices are authorized and obliged to carry out the assessment on behalf of the Cantonal Tax Office.

II. Competence

for

Assessment

1. 1. 25-127

49

631.1 Tax Law (TL)

III. Assessment

Municipality

1. In the case

of taxation

under the ordinary

procedure

2. In the case

of withholding taxes

IV. Tax Register

and Data

Exchange

1. Communal

Tax Register

Art. 108: Tax Act (TA) Open official source

84 1 The assessment is carried out in the municipality where the taxpayer has their tax domicile or residence, their seat, or their actual administration at the end of the tax period or tax liability. Section 190 para. 2 remains reserved.

2 For taxpayers with tax domicile or residence, seat, or actual administration outside the canton, the assessment is carried out in the municipality where the taxable values or their main parts are located at the end of the tax period or tax liability.

3 In cases of doubt, the cantonal tax office designates the assessment municipality.

Art. 109: Tax Act (TA) Open official source

1 For taxes levied at source, the assessment municipality is the municipality in which

a. foreign employees with unlimited tax liability in the canton have their tax domicile or residence;

b. employees, artists, athletes, or speakers residing abroad carry out their activity;

c. the real estate pledge is located.

2 In other cases, the assessment municipality is the municipality in which the debtor of the taxable benefit has its seat or permanent establishment at the time of maturity.

3 In cases of doubt, the cantonal tax office designates the assessment municipality.

**Art. 109a : Tax Act (TA)** Open official source

41 1 The municipal tax office maintains the municipal tax register. This records

a. taxpayers for whom the municipality is responsible as the assessment municipality;

b. taxpayers in the municipality for whom another Zurich municipality is responsible as the assessment municipality.

2 The municipal tax office conducts the tax declaration procedure and tax collection based on the municipal tax register.

3 The resident registration offices of the respective municipalities are responsible for granting and controlling access authorizations, as well as for exercising access. They limit the number of authorized users.83

4 The resident registration offices of the respective municipalities protect access and ensure its logging. They subject infrastructure and technical measures to regular risk assessments.83

50

Tax Act (StG)

631.1

Art. 109b : Tax Act (TA) Open official source

41 1 The Cantonal Tax Office maintains the Cantonal Tax 2. Cantonal

Register. This register includes all individuals taxable in the canton. Tax Register

For the registration of these individuals, the Cantonal Tax Office relies on

the communal tax registers.

2 The Cantonal Tax Register serves the Cantonal Tax Office

as a basis for the fulfillment of its duties.

Art. 109c : Tax Act (TA) Open official source

112 3. Cantonal Regulations

**a. Electronic Procedures and Data Exchange**

1 The Directorate of Finance may enable taxpayers and other parties to the proceedings to submit tax returns and other filings electronically. In this case, an electronic confirmation of the information replaces a signature.

2 Documents may be delivered to taxpayers and other parties to the proceedings electronically with their consent.

3 The Directorate of Finance may issue regulations concerning electronic procedures, data storage, data processing, and data exchange, specifically in relation to

a. the electronic submission of tax returns and other filings by taxpayers and other parties to the proceedings, including the applications to be used for this purpose;

b. the electronic delivery of documents to taxpayers and other parties to the proceedings, including the applications to be used for this purpose;

c. data storage, data processing, and data exchange between the cantonal tax office and the municipal tax offices, including the data to be exchanged, the interfaces to be provided by the municipal tax offices for receiving data from the cantonal tax office, and the interfaces to be observed by the municipal tax offices when delivering data to the cantonal tax office;

d. data storage and data processing by third parties on behalf of the cantonal tax office or the municipal tax offices.

4 The Canton may provide municipal tax offices with applications for the enforcement of the Tax Law, and the Directorate of Finance may prescribe their joint use by the cantonal tax office and the municipal tax offices. The Canton shall bear the costs for the development and introduction of new applications in the municipalities. The Canton and the municipalities shall each bear half of the operating and usage costs. The share of each municipality shall be determined by its population. The municipalities shall bear their personnel costs and the costs for the depreciation of their own systems. When planning and procuring such applications, the Canton shall consider the interests and needs of the municipal tax offices.

5 Data exchange between the tax authorities may take place in an automated retrieval procedure or within the framework of an application jointly used by the cantonal tax office and the municipal tax offices. Population data may be obtained either from the municipal population registers or from the cantonal population data platform and used by the tax offices of the Canton and the municipalities for the fulfillment of their duties.

6 If a municipal tax office fails to comply with these regulations, the Canton may impose any resulting additional costs on the municipality. The Directorate of Finance shall set a reasonable deadline for the municipality to fulfill its obligations and shall inform it of its liability for costs.

Art. 109d: Tax Act (TA) Open official source

62 1 The Directorate of Finance may issue regulations concerning

**a.** **the electronic capture and archiving of tax returns and other tax files by the municipal tax offices and the Cantonal Tax Administration;**

**b.** **the destruction of tax returns and other tax files after electronic capture;**

**c.** **the forwarding of electronically captured tax data from the municipal tax offices to the Cantonal Tax Administration.**

**2 For the forwarding, § 109c para. 1 lit. c and para. 2 apply mutatis mutandis.**

Art. 110: Tax Law (TL) Open official source

The administrative and assessment authorities are subject to the supervision of the Directorate of Finance.

Art. 111: Tax Act (TA) Open official source

1. Against dereliction of duty, denial of justice, or undue delay in rendering justice by administrative and assessment authorities, an appeal may be filed with the Department of Finance within 30 days of discovering the grounds.

2. An appeal against the decision of the Department of Finance may be filed with the Government Council within 30 days of service.

3. If the appeal is rejected by the Department of Finance or the Government Council, costs may be imposed on the appellants.

B. Tax Appeals Court 58

Art. 112: Tax Act (TA) Open official source

58 The Cantonal Council determines the seat of the Tax Appeals Court (StRG).

Tax Act (StG)

Art. 113: Tax Act (TA) Open official source

107 1 The Cantonal Council, after hearing the Administrative Court, determines the number of members and their level of employment, as well as the number of substitute members.

2 It elects the members and the substitute members. The Tax Appeals Court has the right to propose one third of the substitute members.

3 Any person entitled to vote in the Canton of Zurich is eligible for election as a member or substitute member.

4 At the beginning and in the middle of a term of office, the Tax Appeals Court elects the President and Vice-President from among its members.

5 The Tax Appeals Court may, with their consent, change the level of employment of individual members of the Tax Appeals Court within the framework of the total percentage of positions. The change ceases upon the departure of an affected member or upon the expiration of the term of office.

Art. 113a : Tax Act (TA) Open official source

58 1 The office of a member of the Tax Appeals Court is incompatible with the professional representation of third parties before the Tax Appeals Court and the Administrative Court.

2 For the disclosure of conflicts of interest, Article 7 of the Law on Judicial and Administrative Organization in Civil and Criminal Procedure of May 10, 2010⁵ applies mutatis mutandis.

Art. 114: Tax Law (TL) Open official source

58 1 The Tax Appeals Court makes its decision with a three-member panel.

2 The full-time or part-time members decide as single judges

a. on appeals that are manifestly inadmissible, are settled by withdrawal or acknowledgement, or have become moot;

b. in cases where the amount in dispute does not exceed CHF 20,000.

3 In cases of fundamental importance, the matter may be submitted to a three-member panel for decision.

4 The amount in dispute is the tax amount affected by the dispute. Insofar as such an amount cannot be numerically determined, the matter falls within the jurisdiction of a three-member panel.

**Art. 115: Tax Act (TA)** Open official source

58 The provisions on procedural principles apply mutatis

mutandis also to proceedings before the Tax Appeals Court. In

addition, the provisions of the Administrative Justice Act of

24 May 19594 regarding appeals apply.

1. 1. 25-127

631.1

II. Composition

and Election

III. Incompatibility;

Disclosure of

Conflicts of

Interest

IV. Staffing

V. Procedure

53

631.1 Tax Law (TL)

VI. Independence and Oversight

Art. 116: Tax Act (TA) Open official source

58 1 The Tax Appeals Court is independent in its judicial activities.

2 It is administratively subordinate to the Administrative Court.

VII. Legal and Administrative Personnel

Art. 117: Tax Law (TL) Open official source

58 1 The Administrative Court determines the number of positions for legal and administrative staff after consulting the Tax Appeals Court.

2 The Tax Appeals Court appoints the staff.

VIII. Ordinances

Art. 118: Tax Act (TA) Open official source

58. The Administrative Court, after consulting the Tax Appeals Court, shall regulate by ordinance

a. its organisation and procedure,

b. its fees, costs, and remunerations.

**IX. Rules of Procedure**

**I. Official Duties**

**1. Recusal**

Art. 118a: Tax Act (TA) Open official source

57 1 The Tax Appeals Court shall issue rules of procedure.

2 The rules of procedure shall require approval by the Administrative Court.

C. General Procedural Principles

Art. 119: Tax Act (TA) Open official source

54 Disqualification

1. Any person who is called upon to make a decision in a matter or to participate in a significant position in an order or decision during the enforcement of this Law is obliged to recuse themselves if they

a. have a personal interest in the matter,

b.44 are connected to a party by marriage or registered partnership, or live with them in a de facto cohabitation,

bbis 43 are related by blood or affinity in the direct line or up to the third degree in the collateral line to a party,

c. are a representative of a party or have acted for a party in the same matter,

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

2. The ground for disqualification can be invoked by anyone involved in the proceedings.

3. If the disqualification is disputed, the head of the cantonal tax office shall decide on it; in the case of members of a collegial body, the collegial body shall decide, excluding the member concerned.

4. The decision may be challenged by appeal and complaint in accordance with the provisions of the Administrative Justice Act of 24 May 19594.

**54**

Tax Law (StG)

631.1

Art. 120 : Tax Act (TA) Open official source

1. Persons entrusted with the enforcement of this Act or who are

called upon to assist in its enforcement, must maintain secrecy

regarding facts that come to their knowledge in the exercise of their

office and regarding deliberations in the authorities, and must refuse

third parties access to official files.

2. Information, including the opening of files, is permissible if there

is an explicit legal basis for it in federal or cantonal law. In the absence

of such a basis, information is only permissible to the extent that it is

required in the public interest. The Department of Finance decides

on corresponding requests.

Art. 121: Tax Act (TA) Open official source

### 1. Obligation of Administrative Authorities, Criminal Investigative Authorities, and Courts to Provide Information

Administrative authorities, criminal investigative authorities, and courts must, irrespective of any potential duty of confidentiality, provide information to the tax authorities from their files upon request; they must also, on their own initiative, notify the tax authorities if, based on observations made during their official activities, there is a probability of incomplete taxation.

### 2. Exceptions

These provisions do not apply to notaries in their capacity as certifying officers, the authorities and personnel of the cantonal bank as well as savings banks and banks of municipalities, and state savings bank auditors.

Art. 122: Tax Act (TA) Open official source

Here is the English translation of the provided text

54 4. Tax Certificates

1 The municipal tax authorities shall issue, for a fee, certificates concerning taxable income and assets, taxable net profit, and taxable capital, based on the latest legally binding assessment or on the latest tax return. Exceptionally, certificates concerning earlier assessments may also be issued.

2 The provisions of the Information and Data Protection Act3, 51 remain reserved.

3 If data in the tax register is blocked, a tax certificate can only be issued if the applicant credibly demonstrates that the blocking hinders them in the pursuit of their own rights against the taxpayer. The request must be submitted to the taxpayer for comment.

4 The decision of the municipal tax office can be appealed by the applicant and the taxpayer to the Department of Finance. The decision of the Department of Finance can be challenged by appeal to the Administrative Court.

5 The tax certificate will only be issued once a legally binding decision regarding the permissibility of its issuance has been made.

1. 1. 25-127

55

631.1

II. Procedural Legal Position of Spouses

III. Procedural Rights of the Taxpayer

1. Access to Files

2. Taking of Evidence

3. Notification of Decisions

Tax Act (TA)

Art. 123: Tax Act (TA) Open official source

1. Spouses who live in a legally and actually undivided marriage exercise the procedural rights and duties accruing to the taxpayer under this Act jointly.

2. They sign the tax return jointly.

3. Appeals and other submissions are considered to have been filed on time if one spouse acts within the deadline.

4. Communications from the tax authorities to married taxpayers who live in a legally and actually undivided marriage are addressed to the spouses jointly. Deliveries to spouses who live in a judicially or actually separated marriage are made to each spouse separately.

Art. 124: Tax Law (TL) Open official source

¹ Taxpayers are entitled to inspect the files submitted or signed by them. Spouses assessed jointly have a mutual right to inspect files.

² Other files are open to the taxpayer for inspection, provided that the ascertainment of the facts has been concluded and insofar as no public or private interests preclude it.

³ If a taxpayer is denied inspection of a document, it may only be used to the detriment of the taxpayer if the authority has verbally or in writing informed them of the essential content for the matter and has also given them the opportunity to comment and to designate counter-evidence.

**Art. 125:** Tax Law (TL) Open official source

The evidence offered by the taxpayer will be taken, to the extent that it is suitable for establishing the facts relevant for the assessment.

Art. 126: Tax Act (TA) Open official source

¹ Decisions, including their grounds, shall be communicated to the parties in writing. In the case of assessment decisions, deviations from the tax return shall be notified.

² If the objection, appeal or complaint is admissible, the decision shall state the type of legal remedy, the authority with which the legal remedy is to be lodged, and the deadline for exercising the legal remedy.

³ If this information is missing and a legal remedy has not been exercised or has been exercised late, the deadline for exercising the legal remedy shall be reinstated upon request.

⁴ A decision regarding an assessment that corresponds to the tax return or is acknowledged in writing by the taxpayer in the course of the assessment or objection procedure shall be notified to them through the final invoice.

Tax Law (StG)

631.1

Art. 127: Tax Act (TA) Open official source

1. **Representation**

Taxpayers may be represented before the authorities charged with the enforcement of this Act, provided their personal cooperation is not necessary.

2. If the taxpayer has appointed a representative, rulings and decisions shall generally be served on the representative; however, service on the taxpayer is also valid.

3. Communications from the municipalities, such as tax declarations, provisional and final invoices, may be served directly on the taxpayer, even if a representative has been appointed.

**Art. 128 : Tax Act (TA)** Open official source

101 1 The tax authorities may require a taxpayer domiciled or resident 5. Necessary

abroad to designate a representative or an agent for service of process Representation

in Switzerland.

2 If the taxpayer fails to comply with this request or if direct service

is not possible for other reasons, publication in the Official Gazette or

filing of the documents shall be deemed as service.

Art. 129: Tax Law (TL) Open official source

1 The statutory time limits cannot be extended. IV. Time Limits

2 The Ordinance shall regulate the extent to which an official time limit may be extended and an expired time limit may be reinstated.

Art. 130: Tax Act (TA) Open official source

Here is the translation of the law article into English

1. The right to assess a tax lapses five years after the end of the tax period. The collection of supplementary taxes and fines remains reserved.

2. The prescription period does not commence or is suspended

a. during objection, appeal, complaint, or revision proceedings,

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

c. as long as neither the taxpayer nor the jointly liable person has a tax-law domicile or residence in Switzerland.

3. The prescription period recommences with

a. any official act aimed at establishing or asserting the tax claim that is brought to the knowledge of a taxpayer or a jointly liable person,

b. any express acknowledgement of the tax claim by the taxpayer or the jointly liable person,

c. the submission of a request for remission,

d. the initiation of criminal prosecution due to completed tax evasion or a tax offense.

4. The right to assess a tax lapses in any event 15 years after the end of the tax period.

V. Prescription

1. Assessment Prescription

1. 1. 25-127

57

631.1

Tax Act (TA)

7. Collection Prescription

D. Assessment in Ordinary Procedure

I. Procedural Duties

1. Tasks of the Tax Authorities

2. Duties of the Taxpayer

a. Tax Return

b. Enclosures to the Tax Return

Art. 131: Tax Act (TA) Open official source

1 Tax claims become time-barred five years after the assessment has become legally binding.

2 The suspension and interruption of the statute of limitations are governed by

Art. 132: Tax Act (TA) Open official source

1 The tax authorities, together with the taxpayer, determine the factual and legal circumstances material for a complete and correct taxation.

2 In particular, they may consult experts, carry out inspections, examine business books and documents on site, and, with their consent, question witnesses. The costs arising therefrom may be imposed in whole or in part on the taxpayer or any other person obliged to provide information, if they have rendered these costs necessary through a culpable breach of procedural duties.

Art. 133: Tax Act (TA) Open official source

112 1 Taxpayers are requested to submit their tax return by public announcement, personal notification, or delivery of the official form. Taxpayers who have not received a personal notification or a form must also submit their tax return.

2 The taxpayer must truthfully and completely fill out the official tax return form, personally sign it, and submit it, along with the prescribed attachments, to the competent authority within the deadline. Differing regulations for electronic submission pursuant to § 109 c paras. 1 and 3 remain reserved.

Art. 134: Tax Act (TA) Open official source

1 Natural persons must enclose with their tax return, in particular

a. wage statements for all income from dependent employment,

b. statements for remuneration received as a member of the management or another

organ of a legal entity,

c. lists of all securities, receivables, and debts,

58

Tax Act (StG)

631.1

d. certificates of contributions made to occupational pension schemes and to other equivalent

pension schemes, provided these are not certified on the wage statement.

2 Natural persons with income from self-employment and legal entities must enclose with their tax return:85

a. the signed annual financial statements (balance sheets, income statements) for the tax period or

b. in the case of simplified accounting according to Art. 957 para. 2 OR11: statements of income and expenses, asset position, as well as private withdrawals and contributions for the tax period.

Art. 135: Tax Law (TL) Open official source

1 The taxpayer must do everything to enable a complete

and correct assessment.

2 Upon request from the tax authority, they must particularly provide

information orally or in writing and present business books, vouchers,

and other certificates as well as documents concerning business transactions.

3 Natural persons with income from self-employment and legal

entities must retain documents and other vouchers related to their

activity for ten years. The manner of keeping and retaining these

is governed by Art. 957–958 f OR11.85.

4 Collective investment schemes with direct real estate holdings

must submit a certificate for each tax period detailing all circumstances

relevant for the taxation of the real estate and its income.

Duty to cooperate

Art. 136 : Tax Law (TL) Open official source

1. **Certification Obligation of Third Parties**

The following are obliged to issue written certificates to the taxpayer

a. Employers regarding their payments to employees and regarding the nature and amount of contributions deducted from wages for occupational pension schemes,

b. Legal entities regarding their payments to members of the management board or other organs,

c. Creditors and debtors regarding the existence, amount, interest, and securing of claims,

d. Insurers regarding the surrender value of insurance policies and regarding benefits paid or owed under the insurance relationship,

e. Foundations regarding payments to beneficiaries,

f. Occupational pension schemes, insurance institutions, and bank foundations regarding contributions and benefits arising from pension relationships,

g. Trustees, asset managers, pledgees, agents, and other persons who hold or have held assets of the taxpayer in possession or administration, regarding these assets and their income,

h. Persons who conduct or have conducted business with the taxpayer, regarding mutual claims and payments.

2. If the taxpayer fails to submit the necessary certificates despite a reminder, the tax authority may demand them from the third party. Legally protected professional secrecy remains reserved.

Art. 137: Tax Act (TA) Open official source

Shareholders, co-owners, and joint owners must, upon request, provide information to the tax authorities regarding their legal relationship with the taxpayer, particularly concerning the latter's shares, claims, and remuneration.

Art. 137a: Tax Act (TA) Open official source

69 Employers who grant employee participation schemes to their employees must submit to the cantonal tax administration a certificate containing all necessary information for their assessment. The provisions issued by the Federal Council based on Article 129 para. 1 lit. d of the Federal Act of December 14, 1990, on Direct Federal Taxation18 apply by analogy.

Art. 138 : Tax Act (TA) Open official source

1 The Cantonal Tax Office reviews the tax return and carries out the necessary investigations.

2 The taxpayer is entitled to orally represent their tax return before the Cantonal Tax Office.

Art. 139: Tax Act (TA) Open official source

1 The cantonal tax office determines the tax factors and the tax rate. Tax factors are the taxable income and assets, the taxable net profit and the taxable capital.

2 If the taxpayer has not fulfilled their procedural obligations despite a reminder, or if the tax factors cannot be determined impeccably due to a lack of reliable documents, the cantonal tax office carries out the assessment according to its best judgment. It may take into account empirical figures, asset development, and the taxpayer's cost of living.

Art. 140: Tax Act (TA) Open official source

1 Against the assessment decision, the taxpayer and the municipality may lodge an objection in writing with the cantonal tax office within 30 days of service.

60

Tax Act (StG)

631.1

2 An assessment made at the discretion of the tax authorities may only be challenged by the taxpayer on grounds of obvious inaccuracy. The objection must be reasoned and must name any evidence.

Art. 141 : Tax Act (TA) Open official source

1. In the objection procedure, the cantonal tax office has the same powers as in the assessment procedure.

2. The taxpayer is entitled to represent their objection orally before the cantonal tax office.

3. A withdrawal of the objection will not be given effect if, according to the circumstances, it is to be assumed that the assessment was incorrect, or if the municipality has submitted proposals.

Art. 142: Tax Act (TA) Open official source

1. The cantonal tax office decides on the objection based on the 3rd decision

investigation. It may reassess the tax factors and, after hearing the taxpayer,

also change the assessment to their disadvantage.

2. The objection procedure is free of charge. However, the costs of this procedure

may be imposed on the taxpayer or any other person obliged to provide information

who has necessitated these costs through a culpable breach of procedural duties.

E. Procedure for the Collection of Withholding Tax101

Art. 143: Tax Law (TL) Open official source

I. Procedural

The taxpayer and the debtor of the taxable benefit must provide the competent tax authorities, upon request, with information, verbally or in writing, regarding the circumstances relevant for the collection of withholding tax. Sections 132–137 apply mutatis mutandis.

obligations

1. Obligation to provide information100

Art. 143a : Tax Act Open official source

100 1 Taxpayers who apply for a subsequent ordinary assessment under § 101a must submit the required documents and designate a delivery address in Switzerland.

2 If no delivery address is designated, or if the delivery address loses its validity during the assessment procedure, the tax authorities shall grant a reasonable period for the designation of a valid delivery address. If this period expires unused, withholding tax shall replace the taxes to be assessed on earned income in the ordinary procedure.

3 Furthermore, § 128 applies mutatis mutandis.

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631.1

Tax Law (StG)

II. Decision

III. Additional demand and Refund

IV. Objection

F. Appeals and Complaints Procedure

Art. 144: Tax Act (TA) Open official source

101 1 The taxpayer may request a ruling from the cantonal tax office

by March 31 of the tax year following the due date of the

payment, regarding the existence and scope of the tax liability, if he

a. does not agree with the withholding tax deduction as per the statement or confirmation

under §§ 92 para. 1 lit. b or 102 para. 1 lit. b

or

b. has not received the statement or confirmation under §§ 92 para. 1 lit. b or 102

para. 1 lit. b from the employer.

2 The debtor of the taxable payment may request a ruling from the cantonal

tax office by March 31 of the tax year following the due date of the payment,

regarding the existence and scope of the tax liability.

3 Until a legally binding decision is rendered, he remains obliged to levy the

withholding tax.

Art. 145: Tax Act (TA) Open official source

1 If the debtor of the taxable performance has not made, or has made an insufficient, tax deduction, the municipal tax office or the cantonal tax office shall oblige them to make a subsequent payment. The debtor's right of recourse against the taxpayer remains reserved.

2 If the debtor of the taxable performance has made an excessive tax deduction, they must repay the difference to the taxpayer.

3 The taxpayer may be obliged by the municipal tax office or the cantonal tax office to make a subsequent payment of the withholding tax owed by them if the disbursed taxable performance has not been reduced, or not fully reduced, by the withholding tax and a subsequent collection from the debtor of the taxable performance is not possible.

Art. 146 : Tax Act (TA) Open official source

Against a decision concerning withholding tax, the taxpayer, the debtor of the taxable benefit, and the municipality may lodge an objection in accordance with § 140.

I. Appeal Procedure

1. Time Limit and Prerequisites

Art. 147 : Tax Law (TL) Open official source

1 The taxpayer and the municipality may, within 30 days of service,

lodge a written appeal with the Tax Appeals Court against the objection

decision of the cantonal tax office.

2 In proceedings concerning the collection of withholding tax,

the right of appeal also lies with the debtor of the taxable benefit.

Tax Act (StG)

631.1

3 All defects in the challenged decision and the preceding proceedings

may be invoked with the appeal.

4 The appeal must contain an application and a statement of grounds.

If it does not meet these requirements, the appellant shall be granted a

short, non-extendable grace period to remedy the defect, with the warning

that otherwise the appeal will not be entertained. The evidence should be

attached to the appeal or, if this is not possible, precisely identified.

Art. 148: Tax Act (TA) Open official source

1. Appeal Procedure

The statement of appeal shall be served on the respondents for their reply, unless the appeal is manifestly inadmissible. A copy of the statement of appeal shall be served on the appellant upon request.

2. Exceptionally, a further exchange of pleadings or an oral hearing may be ordered.

3. The Tax Appeals Court58 has the same powers as the tax authorities in the assessment procedure.

Art. 149: Tax Act (TA) Open official source

58 1 Decision

The Tax Appeals Court decides within 60 days of the conclusion of the fact-finding investigations, which is communicated to the parties. If this deadline cannot be met, the parties will be informed, stating the reasons, when the decision will be available.

2 The Tax Appeals Court is not bound by the parties' applications in its decision. It may, after hearing the taxpayer, also change the assessment to their disadvantage. It continues the proceedings despite the withdrawal or acknowledgment of the appeal, provided there are indications that the contested decision or the consistent applications contradict the law, or if an opposing party has submitted a divergent application.

3 Exceptionally, to preserve the statutory appeal process, it may refer the matter back to the lower instance for reassessment, particularly if no substantive decision has yet been made incorrectly or if such a decision suffers from a serious procedural defect.

Art. 150: Tax Act (TA) Open official source

4. Notification

58 The decision shall be communicated to the parties in writing. It shall contain the composition of the Tax Appeals Court, a statement of reasons, the operative part, and information on legal remedies.

Art. 150a : Tax Act (TA) Open official source

57 1 In the case of manifestly unfounded and manifestly well-founded 5. Simplified

legal remedies, a decision can be made unanimously by circulation. procedure

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631.1

Tax Law (StG)

6. Court

fee

7. Imposition

of costs

8.58 Party

compensation

II. Appeal

procedure before

the Administrative

Court

2 In the case of manifestly inadmissible, obsolete, manifestly unfounded, and manifestly well-founded legal remedies, the Tax Appeal Court can provide a summary reasoning for its decision.

3 Appeals that are settled by withdrawal or recognition, or that have become obsolete, can be decided without reasoning if the parties to the proceedings are notified that they can request a written reasoning within ten days of the notification; the appeal period begins upon delivery of the reasoned decision.

Art. 150b : Tax Law (TL) Open official source

57 1 The Tax Appeals Court determines the court fee based on its time spent, the complexity of the case, and the amount in dispute or the actual value in dispute.

2 The court fee typically ranges from CHF 500 to CHF 50,000.**

Art. 151: Tax Act (TA) Open official source

58 1 The costs of the proceedings before the Tax Appeals Court shall be imposed on the losing party. If the appeal is partially upheld, they shall be apportioned proportionally.

2 The costs shall be imposed in whole or in part on the prevailing appellant if, with due diligence, they could have asserted their rights already in the assessment or objection proceedings, or if they have complicated the investigation by the Tax Appeals Court through dilatory conduct.

3 If special circumstances warrant it, the imposition of costs may be waived.

Art. 152: Tax Act (TA) Open official source

For the awarding of party costs, the Administrative Justice Act⁴ applies mutatis mutandis.

**Art. 153 : Tax Act (TA)** Open official source

1 Against the decision of the Tax Appeals Court, the taxpayer, the cantonal tax office, and the municipality may lodge an appeal with the Administrative Court within 30 days of service.58

**2 In proceedings for the collection of withholding tax, the right of appeal also belongs to the debtor of the taxable performance.**

**3 The appeal may invoke all violations of law, including exceeding or abusing discretion, and the incorrect or incomplete ascertainment of the legally relevant facts.**

**4 Furthermore, the provisions concerning the appeals procedure before the Tax Appeals Court apply by analogy.58**

**64**

**Tax Law (StG)**

**631.1**

Art. 154: Tax Law (TL) Open official source

1 Against the decision of the Administrative Court, III. Appeal

the taxpayer, the cantonal tax office, the municipality and the federal-

Federal Tax Administration may appeal to the Federal Court

lodge.54

2 In proceedings concerning the collection of withholding tax, the right to appeal

the right of appeal also belongs to the debtor of the taxable performance.

G. Amendment of legally binding decisions

Art. 155: Tax Act (TA) Open official source

1. Revision

A legally binding decision can be revised, upon request or ex officio, in favour of the taxpayer

a. if significant facts or decisive evidence are discovered;

b. if the deciding authority disregarded significant facts or decisive evidence that it knew or ought to have known, or otherwise violated essential procedural principles;

c. if a crime or a misdemeanor influenced the decision.

2. Revision is excluded if the applicant, as a ground for revision, invokes circumstances that, with reasonable diligence, could have been asserted during the ordinary proceedings.

Art. 156: Tax Act (TA) Open official source

1. Grounds

The request for revision must be submitted within 90 days after discovery of the ground for revision, but at the latest within ten years after communication of the decision.

Art. 157 : Tax Law (TL) Open official source

1 The Revision Request

1 The revision request must be submitted in writing to the authority that made the decision.

2 The revision request must contain

a. the precise designation of the individual grounds for revision,

b. a motion specifying to what extent the previous decision should be overturned and how the new decision should be.

3 The evidence for the grounds for revision, as well as for the assertion that 90 days have not yet passed since the discovery of the grounds for revision, should be attached to the revision request or, if this is not possible, precisely designated.

Art. 158: Tax Law (TL) Open official source

1. Revision

4. Procedure

and Decision

1 The request for revision shall, unless it is manifestly inadmissible, be submitted to the parties for comment.

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631.1 Tax Law (StG)

2 If the authority considers the request for revision to be justified, it shall set aside the earlier decision and issue a new decision.

3 The same legal remedies may be invoked against the rejection of a request for revision or against the new decision issued upon admission of the revision, as against the earlier decision.

4 In all other respects, the provisions concerning the procedure in which the earlier decision was rendered shall apply. Section 150 shall apply mutatis mutandis.

II. Correction of Calculation

Errors and

Clerical Errors

III. Subsequent Tax

1. Ordinary

Subsequent Tax62

2. Forfeiture

3. Procedure

Art. 159 : Tax Act (TA) Open official source

1 Calculation errors and clerical mistakes in legally binding

decisions can be corrected, upon application or ex officio, within five years

of their notification, by the authority that made them.

2 The same legal remedies may be invoked against the correction or its refusal

as against the original decision.

Art. 160: Tax Act (TA) Open official source

## 1. Undue Failure to Assess or Incomplete Final Assessment

If, based on facts or evidence previously unknown to the tax authority, it emerges that an assessment was unduly omitted, or a legally binding assessment is incomplete, or if an omitted or incomplete assessment is attributable to a crime or offense against the tax authority, the uncollected tax, together with interest, shall be recovered as a supplementary tax.

## 2. No Supplementary Tax if Complete and Accurate Disclosure and Accepted Valuation

If the taxpayer has fully and accurately declared income, assets, net profit, or equity in their tax return and the tax authorities have accepted the valuation, no supplementary tax can be levied, even if the valuation was insufficient.

Art. 161: Tax Act (TA) Open official source

1 The right to initiate a supplementary tax procedure expires ten years after the end of the tax period for which an assessment was wrongly omitted or a legally binding assessment is incomplete.

2 The right to determine the supplementary tax expires 15 years after the end of the tax period to which it relates.

Art. 162 : Tax Act (TA) Open official source

54 1 The initiation of the supplementary tax procedure shall be communicated to the taxpayer in writing, stating the reason. If the initiation of criminal proceedings for tax evasion is possible, the taxpayer shall be informed thereof upon the initiation of a supplementary tax procedure.

2 Concurrently with the state supplementary tax, the municipal supplementary tax shall also be assessed.

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631.1

3 An appeal against the objection decision of the cantonal tax office may be lodged with the Administrative Court. In all other respects, the provisions regarding procedural principles, the assessment procedure, and the appeal procedure apply mutatis mutandis.

Art. 162a : Tax Act (TA) Open official source

61 1 All heirs are independently entitled to a simplified subsequent 4. Simplified

taxation of the assets and income components concealed by the subsequent

deceased if taxation for

a. the concealment is not known to any tax authority, heirs

b. they unreservedly assist the authorities in determining the concealed

asset and income elements, and

c. they seriously endeavor to pay the outstanding subsequent tax.

2 The subsequent tax is calculated for the last three tax periods

preceding the year of death according to the provisions on ordinary

assessment and claimed together with interest.

3 Simplified subsequent taxation is excluded if the inheritance is

liquidated officially or by bankruptcy proceedings.

4 The executor or the administrator of the estate may also request

simplified subsequent taxation.

H. Inventory

Art. 163: Tax Act (TA) Open official source

1 Within two weeks of a taxpayer's death, an official inventory will be taken.

2 The taking of an inventory can be omitted if it can be assumed that no assets exist.

I. Inventory Duty

Art. 164: Tax Law (TL) Open official source

II. Subject Matter

1 The inventory shall include the property of the deceased, his spouse living in an undivided marriage, and minor children under his parental care, existing on the day of death.30

2 Facts material for valuation shall be ascertained and noted in the inventory.

Art. 165: Tax Law (TL) Open official source

1. Heirs and persons who manage or safeguard the estate assets may only dispose of them with the consent of the inventory authority before the inventory is taken.

III. Safeguarding

of the inventory

2. To safeguard the inventory, the inventory authority may immediately seal the assets. This measure may also be taken by the cantonal tax office.

IV. Duties to cooperate

V. Duty to provide information and certification

VI. Notification

VII. Inventory authority

631.1

Tax Law (StG)

1. 1. 25-127

67

Art. 166 : Tax Act (TA) Open official source

1 The heirs, the legal representatives of heirs, the estate

administrators, and the executors are obligated

a. to provide truthful information regarding all circumstances that may be relevant for determining the tax factors of the deceased,

b. to present all books, documents, credentials, and records that can provide insight into the estate,

c. to open all premises and containers that were at the disposal of the deceased.

2 Heirs and legal representatives of heirs who lived in a common household with the deceased or who held or managed assets of the deceased must also grant access to their rooms and containers.

3 If an heir, a legal representative of heirs, an estate administrator, or an executor gains knowledge of estate assets not listed in the inventory after the inventory has been drawn up, they must report these to the inventory authority within ten days.

4 The inventory taking must be attended by at least one heir with capacity to act and the legal representative of minor heirs or heirs under comprehensive guardianship.63

Art. 167 : Tax Law (TL) Open official source

1 Third parties who held or managed assets of the deceased or against whom the deceased had monetary rights or claims are obliged to provide the heirs, for the attention of the inventory authority, with all related information in writing upon request.

2 If there are important reasons preventing the fulfillment of this duty to provide information, the third party may provide the requested information directly to the inventory authority.

3 Otherwise, §§ 136 and 137 apply mutatis mutandis.

Art. 168: Tax Act (TA) Open official source

A copy of the inventory will be sent to the executor or the representative designated by the heirs and to the cantonal tax office.

Art. 169: Tax Law (TL) Open official source

1 Inventory taking is carried out by the tax office of the assessment municipality. However, if the deceased moved their domicile to another Zurich municipality in the year of death, the tax office of that municipality is responsible. The cantonal tax office may be represented during the inventory taking.

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2 If the child and adult protection authority or the court orders an inventory taking, a copy of the inventory is sent to the inventory authority. This authority can adopt it or supplement it if necessary.63

I. Procedure for Tax Exemptions

Art. 170: Tax Act (TA) Open official source

1 Applications for tax exemption must be submitted to the cantonal tax office.

2 The cantonal tax office submits them to the municipality for consultation.

Art. 171: Tax Act (TA) Open official source

II. Procedure

1 If a request for tax exemption is rejected, costs may be imposed.

2 Furthermore, the provisions concerning procedural principles, the assessment procedure, and the appeal and complaint procedures apply mutatis mutandis.

Art. 171a : Tax Law (TL) Open official source

61 The Cantonal Tax Office publishes a register III. Register

of legal entities exempt from tax due to the pursuit of public or charitable purposes (§ 61 lit. g). The affected legal entity can have its entry blocked by written notification to the Cantonal Tax Office.

of exempt institutions

Section Six: Tax Collection and Tax Remission

A. Tax Collection

Art. 172: Tax Act (TA) Open official source

I. Authority

The withholding taxes on income from dependent employment of foreign employees taxable in the canton, as well as the state and communal supplementary taxes, are collected by the Cantonal Tax Office; all other taxes are collected by the Communal Tax Office.

Art. 173: Tax Act (TA) Open official source

II. Periodic Taxes

1. Provisional Invoice

and Final Invoice

1 In the tax period, for tax periods deviating from the calendar year,

in the calendar year in which the tax period ends, a provisional

invoice shall be sent. Subject to Section 181.

2 The basis for the provisional invoice shall be the tax factors

of the last tax return or the last assessment or the

estimated tax amount for the current tax period.

3 After the assessment has been made, the final invoice shall be sent.

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2. Interest

Art. 174: Tax Act (TA) Open official source

1. Interest is generally calculated in the final statement

a. in favor of the taxpayer on all payments made up to the final statement. Instead of this interest, discounts may also be granted,

b. at the expense of the taxpayer from a due date within the tax period.

2. The details, including the due date within the tax period, shall be laid down by ordinance.

III. Non-periodic taxes

Art. 175: Tax Law (TL) Open official source

1. Due Dates and Payment Deadlines for Non-Recurrent Taxes

shall be determined by ordinance.

2. For early payments, compensation interest shall generally be calculated.

For late payments, default interest shall be levied.

3. On tax refunds, compensation interest shall be granted.

IV. Competence of the

Government Council

Art. 176: Tax Act (TA) Open official source

The Government Council sets the interest rate. It also determines the extent to which interest in favor of or against the taxpayer may be waived due to insignificance.

V. Payment facilities

Art. 177: Tax Law (TL) Open official source

1 If special circumstances exist, the municipal tax office may temporarily defer due amounts or grant payment by instalments.

2 Payment facilities shall be revoked if the conditions for them cease to exist or if the conditions to which they are linked are not fulfilled.

VI. Objection

and Appeal

Art. 178: Tax Act (TA) Open official source

54 1 An objection against the final account or the decision regarding

a payment facility may be lodged with the municipal tax office; an appeal

against the objection decision may be lodged with the cantonal tax

office. A complaint against the decision of the cantonal tax

office may be lodged with the Administrative Court.

2 The provisions concerning the objection, appeal, and complaint

procedures for assessments for state taxes apply mutatis mutandis.

VII. Tax Refunds

1. To Spouses

Living Separately

Art. 179: Tax Act (TA) Open official source

1 In the case of tax refunds to spouses who live in a factual and

legal unseparated marriage, each spouse is considered entitled to

receive payments.

2 Tax refunds can also be offset against provisional invoices or

final invoices.

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Art. 180: Tax Act (TA) Open official source

¹ If the spouses have been divorced or have separated de facto or de jure, and subsequently tax amounts are to be refunded that were paid based on provisional invoices or final invoices addressed to both spouses, the refund shall be made in equal halves to each of the two spouses.

² Such tax refunds can also be offset

a. either against provisional invoices or final invoices addressed to both spouses,

b. or in equal halves against provisional invoices or final invoices addressed to each spouse.

³ Furthermore, it remains reserved that the spouses have themselves notified the competent tax office of a different agreement.

B. Tax Security

Art. 181 : Tax Act (TA) Open official source

1. If the Taxpayer Has No Domicile in Switzerland

or if the payment of the tax owed by them appears to be endangered, the municipal tax office or the cantonal tax office may demand the securing of the presumably owed tax amount even before the assessment becomes legally binding. The securing order specifies the amount to be secured and is immediately enforceable. In debt collection proceedings, it has the same effects as an enforceable court judgment.

**2. The security must be provided in money, by depositing safe, marketable securities, or by guarantee.**

**3. The taxpayer may file an appeal against the securing order with the Administrative Court.** The provisions regarding the appeal procedure for assessments for state taxes apply mutatis mutandis.

**4. The appeal does not suspend the enforcement of the securing order.**

Art. 182: Tax Act (TA) Open official source

¹ The safeguarding order is considered an arrest warrant according to

Art. 183 : Tax Act (TA) Open official source

Taxpayers whose ability to pay is impaired by special circumstances, such as an extraordinary burden due to family maintenance, persistent unemployment or illness, accidents, impoverishment, incapacity to earn an income, or other circumstances, may be granted a full or partial remission of taxes.

Art. 184: Tax Law (TL) Open official source

1 The decision regarding tax remission lies with the municipality.

**2 The municipal executive board designates the competent authority.**

**3 The decision must be communicated to the taxpayer and, if tax remission is granted, to the cantonal tax office.**

Art. 185: Tax Act (TA) Open official source

54 1 The taxpayer and the Cantonal Tax Office may file an appeal with the Directorate of Finance within 30 days of service against the decision of the municipality. The Cantonal Tax Office is entitled to file an appeal only if the assessed taxes exceed an amount to be determined by the Cantonal Government. The taxpayer and the municipality may file a complaint with the Administrative Court within 30 days of service against the decision of the Directorate of Finance.

2 The provisions regarding the appeal and complaint procedure for assessments of state taxes apply *mutatis mutandis*.

Art. 186 : Tax Act (TA) Open official source

55

Part Two: Municipal Taxes

Section One: General Municipal Taxes

A. General Provisions

1. Tax Liability

1. Types of Taxes

Art. 187: Tax Act (TA) Open official source

1 The municipalities levy annually as municipal taxes

a. Income and wealth taxes from natural persons,

b. Profit and capital taxes from legal persons,

c. Withholding taxes from certain natural persons with tax-

law domicile or residence in the canton.

2 The political municipality also levies an annual personal

tax and withholding taxes from certain natural and legal persons

without tax-law domicile or residence in Switzerland.

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631.1

Art. 188 : Tax Act (TA) Open official source

The municipalities shall fix the tax rate 2. Tax rate

**in percentages of the simple cantonal tax each calendar year.**

Art. 189: Tax Act (TA) Open official source

1 The provisions concerning tax liability for state 3. Existence

taxes apply, subject to the following provisions, and Scope

also to municipal taxes.

of Tax

Liability

a. In General

2 Decisions made for state taxes regarding the existence

and scope of tax liability also apply to municipal taxes.

**Art. 190: Tax Act (TA)** Open official source

84 1 If a taxpayer transfers their tax domicile or their seat to another Zurich municipality, tax

the tax sovereignty for the current tax period belongs to the municipality of immigration or seat.

of domicile

2 Capital benefits according to § 37 are taxable in the municipality in which the taxpayer has their domicile at the time the benefit becomes due.

Art. 191: Tax Law (TL) Open official source

1 If a person is liable to tax in several Zurich municipalities, a tax allocation will be made between the municipalities involved if the portion of the simple cantonal tax attributable to a municipality in which only limited tax liability exists amounts to at least CHF 2,000.

2 One-fifth of the simple cantonal tax is to be allocated in advance to the municipality of residence or registered office. The remaining four-fifths are to be allocated to the municipalities involved in proportion to their respective shares of the total income and total assets.

c. Tax Liability

in Several

Municipalities

Art. 192 : Tax Act (TA) Open official source

1. Is the communal tax sovereignty disputed, the II. Tax Appeals Body

of the relevant municipality decides on the communal tax liability.

2. An appeal may be lodged against this decision. The provisions

regarding the appeal procedure for assessments for state taxes apply

mutatis mutandis.

Art. 193: Tax Act (TA) Open official source

2. Tax apportionment

**a. Registration**

Municipalities that are requesting a tax apportionment for the first time must register their claim with the taxpayer and the assessment municipality in the tax period or the following period. Claims registered later are forfeited.

Art. 194: Tax Act (TA) Open official source

1. The tax office of the assessment municipality or, upon its b. Determination

request, the cantonal tax office determines the allocation of bases

bases based on the assessment for the state tax and any further

investigations.

2. The provisions concerning the assessment procedure for state

taxes apply mutatis mutandis.

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631.1

c. Objection

3. Legal Remedies

Tax Act (TA)

Art. 195: Tax Act (TA) Open official source

The taxpayer and the involved municipalities may lodge an objection against the determination of the allocation bases. The provisions concerning the objection procedure for assessments for state taxes apply mutatis mutandis.

Art. 196: Tax Act (TA) Open official source

For challenging decisions on objections regarding the existence and extent of municipal tax liability, the provisions concerning the appeals and complaints procedure for assessments for state taxes apply mutatis mutandis.

III. Tax Collection

Art. 197 : Tax Law (TL) Open official source

1 The provisions on tax collection and tax remission

for state taxes shall apply accordingly.

1. In general

2. Upon separation

2 A tax remission granted for the state tax results in a corresponding

remission of the municipal tax.

Art. 198: Tax Act (TA) Open official source

When tax apportionments are made, the tax office of the commune of assessment is responsible for tax collection and settles accounts with the taxpayer and the communes involved.

I. Personal tax

B. Special provisions

Art. 199: Tax Act (TA) Open official source

1 Political communes levy a personal tax on taxable natural persons who have their tax domicile or residence in their territory.

1. Tax Liability

2 Spouses each owe the full personal tax.

3 The tax liability begins in the year in which the taxpayer comes of age.63

2. Tax Rate

II. Church Tax

1. Tax Liability

a. In General

b. Taxation of Denominationally Mixed Marriages

Art. 200 : Tax Act (TA) Open official source

The personal tax amounts to CHF 24.

Art. 201: Tax Act (TA) Open official source

1. **Parishes of Cantonal Ecclesiastical Bodies Can Levy Taxes**

Parishes of the cantonal ecclesiastical bodies may levy taxes in accordance with this law.

2. **Legal Entities Pursuing Confessional Purposes**

Legal entities pursuing confessional purposes are only liable to pay church tax to the parish of that denomination.

Art. 202: Tax Act (TA) Open official source

1 If, in denominationally mixed marriages, both spouses belong to the denomination of a state-recognized church community, church tax will be levied in equal halves.

2 If only one spouse belongs to the denomination of a state-recognized church community, church tax will be levied in half.

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631.1

Art. 203: Tax Act (TA) Open official source

52 1 If there are parish communities of the cantonal ec- c. Taxation

clesiastical corporations with different denominations in the same territory,

they levy church tax on legal entities proportionally, several parishes

to the extent that these do not pursue denominational or religious purposes.

2 The proportions are calculated according to the number of taxable

persons belonging to the individual parish communities.

3 If an association of communes exists between parish communities for the standardization

of the tax rate, the apportionment is carried out according to the same

principle within the territory of the association of communes.

persons by

communities

Art. 204: Tax Act (TA) Open official source

1. The competent church authority decides on the existence and extent of the church tax liability.

2. Its decision can be appealed in accordance with the provisions applicable to decisions on municipal taxes.

Second Section: Property Taxes

A. General Provisions

Art. 205: Tax Act (TA) Open official source

34 The political communes levy a real estate profit tax. I. Types of Taxes

Art. 206: Tax Act (TA) Open official source

The provisions concerning state taxes apply *mutatis mutandis*

—subject to the following provisions— also to land taxes.

II. Application

of Provisions

Concerning State

Taxes

Art. 207: Tax Act (TA) Open official source

III. Real Estate

1 The following are considered real estate within the meaning of the subsequent provisions

a. properties,

b. independent and permanent rights recorded in the Land Register,

c. mines,

d. co-ownership shares in real estate.

2 Accessories are disregarded.

Art. 208: Tax Act (TA) Open official source

Für Grundsteuern steht den Gemeinden an den bezüg- IV. Tax

lichen Grundstücken ein gesetzliches Pfandrecht zu.

Lien on

Real Estate

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631.1 Tax Law (StG)

V. Assessment

Procedure

1. Preparation

of the

Assessment

2. Decision

3. Objection

VI. Legal

Remedies

1. Appeal

2. Appeal

to the

Administrative

Court

3. Appeal

to the

Federal Supreme

Court

VII. Statute

of Limitations

I. Taxable Event

Art. 209: Tax Act (TA) Open official source

1 The preparation of the assessment is incumbent upon the municipal tax office.

2 The notarial offices and land registries are required, in accordance with the provisions of the law and the ordinance, to cooperate in the preparation and execution of the assessment and to provide information from their records.

Art. 210 : Tax Act (TA) Open official source

1 The assessment is carried out by the municipal executive86

or by a commission appointed by it, acting under the chairmanship of one of its members.

2 The authority responsible for the assessment also decides

on tax exemptions, back taxes, fines, as well as on the existence and extent of the legal lien for property taxes.

Art. 211 : Tax Act (TA) Open official source

The taxpayer can file an objection against the decision of the municipal authority. The provisions concerning the objection procedure for assessments for state taxes apply mutatis mutandis.

Art. 212 : Tax Law (TL) Open official source

Against the objection decision, the taxpayer may

lodge an appeal with the Tax Appeals Court58. The provisions concerning

the appeal procedure for assessments for state taxes apply

mutatis mutandis. Section 252 remains reserved.

Art. 213 : Tax Act (TA) Open official source

Against the decision of the Tax Appeals Court,58 the taxpayer and the municipality may lodge an appeal with the Administrative Court. The provisions concerning the appeals procedure before the Administrative Court for assessments of state taxes apply mutatis mutandis.

**Art. 214 : Tax Act (TA)** Open official source

54 The right to lodge a complaint against a cantonal

Administrative Court's decision concerning real estate gains tax with the Federal Supreme Court is vested in the taxpayer, the municipality, the cantonal tax office, and the Federal Tax Administration.

Art. 215 : Tax Act (TA) Open official source

1 The right to assess property taxes lapses five

years after the end of the year in which the transfer of ownership took place.

The collection of supplementary taxes and fines remains reserved.30

2 In all other respects, Sections 130 and 131 apply by analogy.

B. Real Estate Capital Gains Tax

Art. 216 : Tax Act (TA) Open official source

1 Real Estate Capital Gains Tax

1 The real estate capital gains tax is levied on profits arising from changes of ownership of real estate or shares thereof.

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Tax Law (StG)

631.1

2 Changes of ownership of real estate are equivalent to

a. legal transactions which, in terms of the power of disposition over a property, have an economic effect similar to a change of ownership,

b. the encumbrance of a property with private law easements or public law restrictions on ownership, if these permanently and significantly impair the unrestricted management or the market value of the property and a consideration is paid for them.

3 The real estate capital gains tax is deferred in the case of

a. change of ownership through inheritance (succession, division of inheritance, legacy), advance inheritance, or gift,

b.30 changes of ownership between spouses in connection with matrimonial property law as well as for the compensation of extraordinary contributions by one spouse to the maintenance of the family (Art. 165 CC) and claims arising from divorce law, provided both spouses agree,

c. land consolidation for the purpose of reallocation, neighborhood planning, boundary adjustment, rounding off of agricultural homesteads, as well as land consolidation in expropriation proceedings or in view of impending expropriation,

d.39 reorganizations within the meaning of §§ 19 para. 1 and 67 para. 1 and 3. A subsequent levy of the real estate capital gains tax in the reassessment procedure according to §§ 160–162 in conjunction with § 206 remains reserved if the conditions according to §§ 19 para. 2 and 67 para. 2 and 4 are met,

e. and f....40

g.98 complete or partial sale of a property belonging to the operating fixed assets, provided that the proceeds are used within a reasonable period for the acquisition or improvement of a replacement property belonging to the operating fixed assets in Switzerland,

h.98 complete or partial sale of an agricultural or forestry property, provided that the proceeds are used within a reasonable period for the acquisition of a self-cultivated replacement property or for the improvement of own, self-cultivated agricultural or forestry properties in Switzerland,

i.98 sale of a permanently and exclusively self-used residential property (single-family house or condominium), provided that the proceeds are used within a reasonable period for the acquisition or construction of an equally used replacement property in Switzerland.

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631.1

Art. 217: Tax Law (TL) Open official source

The seller is liable to taxation.

Tax Act (TA)

Art. 218: Tax Act (TA) Open official source

Exempt from real estate gains tax are only gains from transfers of real estate

a. of the Confederation and its institutions in accordance with federal law,

b. of the Canton and its institutions, the municipalities of Zurich and their institutions, as well as the special purpose associations of municipalities within the meaning of municipal law, provided that the real estate has directly served public or charitable purposes or religious purposes,

c. 46, 52 of foreign states within the scope of § 61 lit. j,

d.71 of transport and infrastructure companies licensed by the Confederation in accordance with § 61 lit. 1, insofar as the gains accrued during a period in which the real estate had a necessary relationship to the licensed activity.

Art. 219: Tax Act (TA) Open official source

1 Real Estate Capital Gains

1 Real estate capital gains are the amount by which the proceeds

exceed the acquisition costs.

2 The last transfer of ownership is decisive for calculating the gain

and the holding period.

3 In the case of acquisition due to inheritance (succession, division of

inheritance, legacy), advance inheritance or gift, due to the establishment,

continuation or dissolution of marital community of property, due to a

divorce decree or a judicially approved divorce agreement, or due to the

transformation, merger or division of sole proprietorships, partnerships

or legal entities in accordance with § 216 para. 3, the earlier transfer of

ownership not attributable to such causes shall be taken as the reference

point.

4 In the case of acquisition due to land consolidation for the purpose of

farm consolidation, neighbourhood planning, boundary adjustment,

rounding off agricultural homesteads, and in the case of land consolidation

in expropriation proceedings or in view of imminent expropriation, the

acquisition of the properties exchanged in this transfer of ownership

shall be taken as the reference point; in the case of replacement purchases

in accordance with § 216 para. 3, the acquisition of the properties sold

in this transfer of ownership shall be taken as the reference point.

5 If the properties exchanged or sold in connection with a replacement

purchase are located in another municipality, no tax apportionment

will be carried out with that municipality.

Art. 220 : Tax Act (TA) Open official source

1 The acquisition price is the purchase price including all other

payments made by the acquirer.

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Tax Law (StG)

631.1

2 If the decisive transfer of ownership dates back more than twenty

years, the taxpayer may deduct the market value of the property twenty

years ago.

3 If the taxpayer acquired the property through compulsory enforcement

proceedings and suffered a loss as a pledge creditor or pledge guarantor

in the process, they may deduct the market value at the time of acquisition

as the acquisition price.

a.

b.

c.

Art. 221 : Tax Law (TL) Open official source

1. **Creditable expenses are:**

a. Expenses for buildings, conversions, meliorations, and other permanent improvements to the property, after deduction of any insurance benefits and contributions from the Confederation, canton, or municipality.

b. Property owner contributions, such as road, pavement, culvert, utility line, or perimeter contributions.

c. Customary real estate agent commissions and advertising costs for acquisition and disposal.

d. Fees associated with the transfer of ownership.

e. Construction loan interest for properties in business assets.

f.104 the value added compensation paid for planning advantages.

2. Natural and legal persons who trade in real estate may claim further expenses related to the property, provided they have expressly waived their consideration for income or profit tax purposes.

3. Expenses incurred during the relevant period of ownership are creditable.

3. Expenses

Art. 222 : Tax Act (TA) Open official source

4. Proceeds

Proceeds are defined as the purchase price, including all other considerations provided by the acquirer.

Art. 223 : Tax Act (TA) Open official source

When parcels of land or shares in such parcels acquired at different times are sold together, the profit must be determined separately for each. However, the basic tax rate (Article 225, para. 1) is calculated based on the total profit.

Art. 224: Tax Act (TA) Open official source

1. When selling properties piecemeal, the total acquisition price is to be 6. Partial

apportioned according to the value ratio at the time of acquisition. sale

2. Expenses are creditable to the extent they relate to the sold parcel;

indivisible expenses are creditable proportionally.

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631.1 Tax Act (TA)

7. Crediting

of Business

Losses

Losses from partial sales can, after the complete sale of the property, be proportionally attributed to the investment costs of the parcels sold at a profit.

Art. 224a is applicable to changes of ownership that occur after the entry into force: Tax Act (StG) Open official source

shall be carried out in accordance with this provision.

Transitional Provisions for the Amendment of April 1, 2019

(OS 74, 535)

Art. 224a: Tax Act (TA) Open official source

90 1 If the business year in which a real estate gain was realized on a property belonging to business assets concludes with a loss that cannot be offset against income tax or profit tax in the relevant tax period, this loss may be deducted from the taxable real estate gain.

2 A deduction in accordance with para. 1 is excluded insofar as the real estate gain is not taxed due to the application of § 220 para. 2.

3 §§ 29 and 70 apply by analogy.

4 The Department of Finance may issue regulations for the coordination of the assessment of income tax and profit tax and the assessment of real estate gain tax.

V. Tax Rates

Art. 225: Tax Act (TA) Open official source

1 The real estate gains tax is

10% for the first

Fr. 4,000

15% for the next

Fr. 6,000

20% for the next

Fr. 8,000

25% for the next

Fr. 12,000

30% for the next

Fr. 20,000

35% for the next

Fr. 50,000

40% for the profit portions exceeding

Fr. 100,000

2 The real estate gains tax calculated in accordance with para. 1 increases

by the following percentages for an creditable ownership period

of less than 1 year by 50 percent,

of less than 2 years by 25 percent.

3 The real estate gains tax calculated in accordance with para. 1 decreases

by the following percentages for a creditable ownership period of

a full 5 years by

5%

a full 6 years by

8%

a full 7 years by

11%

a full 8 years by

14%

a full 9 years by

17%

a full 10 years by

20%

a full 11 years by

23%

a full 12 years by

26%

a full 13 years by

29%

a full 14 years by

32%

a full 15 years by

35%

80

Tax Act (TA)

a full 16 years by

38%

a full 17 years by

41%

a full 18 years by

44%

a full 19 years by

47%

a full 20 years and more by

50%

4 For real estate owned by transport and infrastructure companies licensed

by the Confederation, the creditable ownership period is the period

during which the real estate had no necessary connection to the licensed

activity.71

5 Real estate gains under Fr. 5,000 are not taxed.

Art. 226 : Tax Act (TA) Open official source

VI. Tax Return

The taxpayer must submit a tax return to the municipal tax office within 30 days of the change of ownership. This deadline is extendable.

Art. 226a: Tax Act (TA) Open official source

99

C. Real Estate Transfer Tax

§§ 227-233.35

Part Three: Tax Criminal Law

A. Violation of Procedural Duties and Tax Evasion

Art. 234: Tax Act (TA) Open official source

I. Violation of Procedural Duties

Whoever intentionally or negligently fails to comply with an obligation incumbent upon them under the provisions of this Act or an order issued on the basis of this Act, despite a warning, shall be punished with a fine of up to CHF 1,000, or in serious cases or in the event of recurrence, up to CHF 10,000.

Art. 235: Tax Law (TL) Open official source

62 I. Tax Evasion

1. Completed Tax Evasion

1 Any taxpayer who, wilfully or negligently, causes an assessment to be wrongfully omitted or a legally binding assessment to be incomplete;

any person obligated to deduct tax at source who, wilfully or negligently, fails to make a tax deduction or fails to make it in full;

any taxpayer or person obligated to deduct tax at source who, wilfully or negligently, procures an unlawful refund or an unjustified remission,

shall be punished with a fine.

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631.1 Tax Law (StG)

2 The fine shall as a rule amount to the evaded tax. In cases of minor culpability, it may be reduced to one-third; in cases of serious culpability, it may be increased up to three times the amount.

3 If the taxable person voluntarily reports tax evasion for the first time, prosecution shall be waived (penalty-free self-declaration) if

a. the evasion is not known to any tax authority;

b. the person unreservedly supports the authorities in determining the evaded asset and income elements; and

c. the person seriously endeavors to pay the due back tax.

4 For every subsequent self-declaration, the fine shall be reduced to one-fifth of the evaded tax under the conditions set out in paragraph 3.

Art. 236: Tax Act (TA) Open official source

1 Attempted tax evasion is punishable.

2 The fine shall amount to two thirds of the fine that would be imposed for completed tax evasion.

Art. 237 : Tax Act (TA) Open official source

1 Any person who intentionally incites or aids a tax evasion,

or who, as a representative of the taxpayer, intentionally causes

or participates in such a tax evasion,

shall be punished with a fine, irrespective of the culpability of the

taxpayer.

2 The fine shall be up to CHF 10,000, and in serious cases or in the

event of recurrence, up to CHF 50,000.

3 The participating third party shall also be jointly and severally liable

for the additional tax up to the amount of the evaded tax.

4 If a person as referred to in paragraph 1 voluntarily reports themselves

for the first time, prosecution shall be waived and joint and several liability

shall cease, if

a. the evasion is not known to any tax authority, and

b. they unreservedly assist the authorities in determining the evaded

asset and income elements.

Art. 238 : Tax Act (TA) Open official source

62 1 Regardless of the tax liability of the taxpayer,

anyone who

a. conceals or diverts assets of an estate which they are obliged to declare in the inventory proceedings with the intent to withdraw them from the inventory recording,

b. incites or assists in such an act, shall be punished with a fine.

82

Tax Law (StG)

631.1

2 The fine shall be 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 divert estate assets is punishable.

4 If a person under para. 1 or 3 makes a first self-report, prosecution for concealment or diversion of estate assets in the inventory proceedings and for any other offenses committed in connection therewith shall be waived (tax-free self-declaration), if

a. the contravention is not known to any tax authority, and

b. the person unreservedly assists the authorities in rectifying the inventory.

Art. 240: Tax Act (TA) Open official source

1. Tax evasion by spouses

The taxpayer living in a legally or factually undivided marriage shall only be fined for the evasion of their own tax factors. Section 237 remains reserved.

2. The mere signing of the tax return does not, in itself, constitute participation within the meaning of Section 237 para. 1 with regard to the factors of the other spouse.

Art. 241 : Tax Act (TA) Open official source

III. Legal Entities

1. General

1 Where, with effect for a legal entity, procedural duties are violated, taxes are evaded, or attempts are made to evade taxes, the legal entity shall be fined.

2 Where, within the business scope of a legal entity, acts of participation (incitement, aiding and abetting, complicity) in tax evasions by third parties are committed, § 237 shall be applicable to the legal entity.

3 The punishment of the acting organs or representatives under § 237 remains reserved.

4 For corporations and institutions under foreign law and for foreign associations of persons without legal personality, paragraphs 1–3 shall apply mutatis mutandis.

Art. 241a : Tax Act (TA) Open official source

61 1 If a taxable legal entity voluntarily discloses a tax evasion committed

in its business operations for the first time, prosecution shall be

waived (tax-free voluntary disclosure) if

a. the evasion is not known to any tax authority,

b. it unreservedly assists the authorities in assessing the additional tax, and

c. it makes serious efforts to pay the additional tax owed.

2 Tax-free voluntary disclosure can also be submitted

a. after a change of company name or relocation of domicile within

Switzerland,

b. after a transformation in accordance with Arts. 53–68 of the Merger

Act of October 3, 2003 (Merger Act)12 by the new legal entity for tax

evasions committed before the transformation,

c. after an absorption (Art. 3 para. 1 lit. a Merger Act12) or spin-off (Art.

29 lit. b Merger Act12) by the surviving legal entity for tax evasions

committed before the absorption or spin-off.

3 The tax-free voluntary disclosure must be submitted by the organs

or representatives of the legal entity. Prosecution against these organs

or representatives shall be waived, and their joint and several liability

shall cease.

4 If a former organ member or a former representative of the legal

entity reports it for tax evasion for the first time, and the tax evasion is

not known to any tax authority, prosecution of the legal entity, all

current and former members of the organs, and all current and former

representatives shall be waived. Their joint and several liability shall

cease.

5 In the case of each subsequent voluntary disclosure, the fine shall

be reduced to one-fifth of the evaded tax under the conditions set out

in para. 1.

6 After the termination of a legal entity's tax liability in Switzerland, no

further voluntary disclosure can be submitted.

IV. Statute of Limitations for Prosecution

Art. 242 : Tax Law (TL) Open official source

85 1 Criminal prosecution for the violation of procedural duties shall lapse three years, and that for attempted tax evasion six years, after the legally binding conclusion of the proceedings in which the procedural duties were violated or tax evasion was attempted.

2 Criminal prosecution for completed tax evasion shall lapse ten years after the expiry of

a. the tax period for which the taxable person was not assessed or was incompletely assessed, or for which the tax deduction at source was not carried out in accordance with the law,

b. the calendar year in which an unlawful refund or an unjustified remission was obtained, or in which inheritance values were concealed or diverted in inventory proceedings.

3 The statute of limitations shall no longer apply if the competent authority has issued a penalty decision in accordance with § 243 before the expiry of the limitation period.

Art. 243: Tax Law (TL) Open official source

V. Criminal Proceedings

1. Investigation and Penalty Decision by Tax Authorities

a. Jurisdiction

1 Insofar as violations of procedural obligations and tax evasions concern the state and communal taxes as well as the withholding taxes, they shall be prosecuted by the cantonal tax office.

2 In the event of violations of procedural obligations and tax evasions in the area of real estate taxes, the initiation of criminal proceedings and the investigation shall be incumbent upon the communal tax office. This office shall submit an application to the communal authority responsible for the assessment of real estate taxes.

Art. 244 : Tax Act (TA) Open official source

1 The institution of criminal proceedings for tax evasion will be B. Commencement of

communicated to the accused in writing, stating the initial suspicion. Proceedings

The accused will be informed of his right to refuse to make a statement

or cooperate.54

2 The institution of criminal proceedings for violation of procedural

duties may occur directly through the issuance of a penal order.

Art. 245: Tax Act (TA) Open official source

1. The Accused may at any time engage counsel.

2. If the subject matter of the criminal proceedings is not a minor case and presents factual or legal difficulties that the accused is unable to handle, an official defense counsel will be appointed for them upon their request, provided they do not possess the means to pay for counsel.

3. The Finance Directorate decides on requests for the appointment of official defense counsel until a potential request for judicial review is submitted. After such a request is submitted, the decision lies with the Administrative Court.

Art. 246 : Tax Act (TA) Open official source

If the accused cannot follow the criminal proceedings for tax evasion because he does not understand the German language, an interpreter will be appointed as necessary.

Art. 247: Tax Act (TA) Open official source

Regarding the essential negotiations and the dispositions, minutes will be continuously kept, providing information about the content, place, and time of the actions and the names of the persons present.

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631.1

Tax Act (TA)

f. Investigation

g. Witness Hearings

h. Conclusion of the Investigation

i. Penalty Order

j. Objection

Art. 248 : Tax Act (TA) Open official source

1 The cantonal tax office or the communal tax office investigates the facts. In particular, the accused may be questioned and witnesses may be heard.

2 Evidence from a subsequent tax procedure may only be used in a criminal procedure for tax evasion if it was not obtained under the threat of an assessment at discretion in the sense of § 139 para. 2, nor under the threat of a fine for violation of procedural obligations.53

3 The accused may inspect the files as soon as this is possible without jeopardizing the purpose of the investigation. Furthermore, the provisions applicable in the ordinary assessment procedure concerning the procedural rights of the taxpayer and the duties of cooperation of third parties and official bodies apply mutatis mutandis.

Art. 249 : Tax Act (TA) Open official source

1 Examination of witnesses

The provisions of the Code of Criminal Procedure apply mutatis mutandis to the examination of witnesses. The order of coercive detention and the examination of the mental state of witnesses are excluded.

**2 Rights of the Accused**

The accused shall, in particular, be given the opportunity to attend the witness examinations and to put supplementary questions to the witnesses.

**3 Banking Secrecy**

Banking secrecy remains reserved.

Art. 250 : Tax Law (TL) Open official source

1 Upon completion of the investigation, the criminal proceedings

will be discontinued or a penal order will be issued.

2 Before a penal order for tax evasion is issued, the accused

person will be given the opportunity to comment.

Art. 251 : Tax Act (TA) Open official source

1 The penal order is issued in writing; it names the accused, the act, the applicable penal provision, the evidence, the penalty, and indicates the right to file an objection. In addition, costs are calculated.54

2 The penal order must be briefly reasoned.

Art. 251a: Tax Act (TA) Open official source

53 1 The accused party and the municipality may lodge a written

objection against the penalty order with the cantonal tax office

within 30 days of its service. The municipality may also lodge

an objection against a discontinuance order.

2 If the municipality lodges an objection, it must include a motion

and a statement of reasons.

Tax Act (StG)

631.1

3 In the area of property taxes, the right to lodge an objection

lies with the accused party; the objection must be submitted to

the municipal tax office.

4 The objection decision shall refer to the right to judicial review.

Costs shall be re-decided. Otherwise, the provisions on investigation

and penalty orders (§§ 245-251) shall apply mutatis mutandis.

5 If no objection is lodged within the deadline or if it is withdrawn,

the penalty order or the discontinuance order shall correspond

to a legally binding judgment.

Art. 252 : Tax Law (TL) Open official source

54 1 The accused and the municipality can, within 30 days of service 2. Judicial

of the objection decision, request a written assessment from the canton's Review

tax office.

Assessment by the Administrative Court

2 In the area of land taxes, the right to request an assessment by a. Request for

the Administrative Court lies with the accused; the request must be Judicial

submitted to the municipal tax office. Review

3 If the municipality submits a request for judicial review, it must

contain a motion and a statement of reasons.

4 A request for judicial review can be withdrawn until the pronouncement

of the judgment.

5 If no request for judicial review is submitted within the deadline

or if it is withdrawn, the objection decision corresponds to a legally

binding judgment.

Art. 253: Tax Act (TA) Open official source

1 The request for judicial review shall be immediately referred to the Administrative Court with the relevant files.

2 The following shall be considered as the indictment:54

a. the objection decision,

b. the request, if it is made by the municipality and thereby a penalty or a higher penalty is requested.

Referral of Files

and Indictment

Art. 254 : Tax Act (TA) Open official source

1 The Administrative Court informs the parties about the receipt of the request for judicial review.

2 The Administrative Court takes, on its own initiative or upon application by a party, the necessary measures to supplement the investigation.

Art. 255 : Tax Act (TA) Open official source

1 The hearing shall be oral and public. For the protection of substantial public or private interests, the Administrative Court may, ex officio or upon application by a party, exclude the public from the whole or part of the proceedings.

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631.1

Tax Act (StG)

2 The Administrative Court shall conduct evidentiary proceedings to the extent necessary.

3 The Administrative Court shall freely assess the evidence. It is not bound by a decision on the subsequent tax.

4 The pronouncement of the judgment shall be public.

Art. 256 : Tax Act (TA) Open official source

1 The accused must appear in person before the Administrative

Court. The Administrative Court may dispense with personal

appearance for important reasons.54

2 If the accused fails to attend the hearing without having been

dispensed from personal appearance, his request for judicial

review will be deemed withdrawn.

3 If the accused was prevented from attending the main hearing

through no fault of his own, he may re-submit the request for

judicial review to the Administrative Court within five days

of the removal of the impediment.

Art. 257 : Tax Law (TL) Open official source

Unless otherwise prescribed by the foregoing provisions, the provisions concerning the appeal procedure for state tax assessments shall apply mutatis mutandis.

Art. 258 : Tax Act (TA) Open official source

54 The convicted person, the municipality, the cantonal tax office, and the Federal Tax Administration may file an appeal against the decision of the Administrative Court with the Federal Supreme Court.

Art. 259: Tax Law (TL) Open official source

If the penal order or the order of discontinuance is challenged solely with regard to the cost imposition, an appeal may be lodged with the Administrative Court. The provisions regarding the appeal procedure for assessments concerning national taxes apply mutatis mutandis.

Art. 260: Tax Act (TA) Open official source

Steuergesetz (StG)

Tax Law (TL)

B. Steuervergehen

B. Tax Offences

631.1

1 Fines falling within the scope of property taxes shall be collected by the municipal tax office and accrue to the municipality concerned.

2 All other fines shall be collected by the cantonal tax office and accrue to the State Treasury.

3 The provisions regarding the collection and remission of state taxes shall apply mutatis mutandis.54

88

Art. 261: Tax Act (TA) Open official source

1. Tax Evasion in the Sense of I. Tax Fraud

§§ 235-237 Whoever, for the purpose of tax evasion, uses falsified, forged, or factually untrue documents, such as business ledgers, balance sheets, income statements, or wage certificates and other third-party attestations, for deception, shall be punished with imprisonment for up to three years or a monetary penalty. A conditional sentence may be combined with a fine of up to CHF 10,000.85

2. Punishment for tax evasion remains reserved.

3. If an unpunishable self-disclosure exists according to §§ 235 para. 3, 237 para. 4, or 241a para. 1, 3, or 4, criminal prosecution for all other offenses committed for the purpose of this tax evasion shall be waived.61

remittance of

withholding taxes

Art. 262 : Tax Act (TA) Open official source

1. Any person who is obliged to deduct tax at source and I. misappropriates

deducted taxes for their own or another's benefit

shall be punished with a custodial sentence not exceeding three years or a monetary penalty.

A conditional sentence may be combined with a fine not exceeding CHF 10,000.85

2. If withholding taxes are misappropriated within the business operations of a legal

entity, a partnership, a corporation or an institution

under public law, paragraph 1 shall apply to the persons

who acted or ought to have acted on its behalf.

3. If a person for the first time self-reports a misappropriation of withholding taxes,

and the conditions for a penalty-free self-declaration

pursuant to §§ 235 para. 3, 237 para. 4 or 241a para. 1, 3 or 4 are met mutatis mutandis,

prosecution for misappropriation of withholding taxes and other criminal offenses

committed for the purpose of misappropriating withholding taxes shall be waived.61

Art. 263: Tax Law (TL) Open official source

1. Procedure

The procedure is governed by the Code of Criminal Procedure.

2. Final decisions are subject to appeal in criminal matters to the Federal Supreme Court.54

Art. 264: Tax Act (TA) Open official source

85 1 Criminal prosecution for tax offenses lapses 15 years, IV. Statute of Limitations

after the offender has committed the last punishable act.

2 The statute of limitations no longer applies if a first-instance

judgment has been rendered before the expiration of the

limitation period.

of Criminal

Prosecution

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631.1

Part Four: Final Provisions

Tax Act (TA)

I. Implementing

Provisions

Art. 265: Tax Act (TA) Open official source

The Government Council issues the ordinances necessary for the implementation of this law.

II. Amendment

or Termination

of the Concordat

on the Exclusion

of Tax Treaties

Art. 266: Tax Act (TA) Open official source

The Government Council is authorized, with the approval of the Cantonal Council, to agree to amendments to the Concordat concerning the Exclusion of Tax Agreements of December 10, 1948, or to terminate this Concordat.

III. Participation of Cantonal Authorities

Art. 267 : Tax Law (TL) Open official source

Where the cooperation of cantonal authorities is provided for federal taxes, tax credits, and tax refunds in international relations, the Government Council is authorized to designate the competent authorities and to issue the necessary implementing provisions within the framework of federal law.

IV. Transitional

Provisions

1. Repeal of

Previous Law

Art. 268 : Tax Law (StG) Open official source

With the entry into force of this Law, the Tax Law of 8 July 1951 is repealed. The following provisions remain reserved.

2. Tax Years

up to and including 1999

Art. 269 : Tax Act (TA) Open official source

1 The new law shall apply for the first time to tax periods ending in the

calendar year 1999. Assessments up to and including the tax year 1998 shall be made under the old law.

The following provisions remain reserved.

2 The assessment of tax evasion offences that were committed before this law came into force shall be carried out under the old law, unless the new law provides a more favourable solution for the taxpayer.

3 The determination and assessment of additional and penal taxes for the tax years up to and including 1998 shall be the responsibility of the cantonal tax office. For the rest, the new law, including Article 255 (3), shall be applicable to the procedure and collection.

3. Pensions and Capital Payments from Occupational Benefit Schemes

Art. 270 : Tax Act (TA) Open official source

1 Annuities and capital payments from occupational pension schemes that commenced or became due before January 1, 1987, or that commence or become due before January 1, 2002, and are based on a pension relationship that already existed on December 31, 1985, shall be taxed at four-fifths of their amount if they have been acquired partly, but at least 20 percent, from own contributions.

90

Tax Law (StG)

631.1

2 Annuities and capital payments from occupational pension schemes for self-employed persons that commenced or became due before January 1, 1987, or that commence or become due before January 1, 2002, and are based on a pension relationship that already existed on December 31, 1985, shall be taxed at four-fifths.

Art. 271 : Tax Act (TA) Open official source

4. Annuities

based on the Federal Law on Accident Insurance for Non-Occupational Accidents that occurred before January 1, 1986, are taxed at three-fifths if the annuity was acquired exclusively from own contributions; if it was acquired partially, but at least 20 percent, from own contributions, it is taxed at four-fifths.

Art. 272 : Tax Act (TA) Open official source

5. Contributions for the purchase of contribution years

Contributions made by the policyholder to occupational pension schemes for the purchase of contribution years are not deductible from taxable income if the pension relationship already existed on December 31, 1985, and the ordinary retirement age according to the law, statutes, or regulations of the pension institution is reached before January 1, 2002.

Art. 273: Tax Law (TL) Open official source

6. Change in the

Temporal Assessment

for Natural Persons

Regarding Income and Wealth Taxes

a. Principle

Income and wealth taxes for the tax period 1999 (transition period) will be levied exclusively under the new law.

Art. 274 : Tax Act (TA) Open official source

of the Federal Act on Debt Collection and Bankruptcy.

The attachment is executed by the competent debt collection office.

2 An objection against the order of attachment under Art. 278 of the Federal

Act on Debt Collection and Bankruptcy is not admissible.

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631.1

C. Tax Remission

Tax Act (TA)

I. Prerequisites

II. Remission

Procedure

1. Decision

of the Municipality

2. Appeal

Art. 275 : Tax Law (TL) Open official source

1 Extraordinary Income

1. Extraordinary income within the meaning of para. 2, which was earned in the calendar year 1998 or in a business year ending therein, and which, under the old law, would have been taxable together with the remaining income in the tax year 1999, shall be subject to a separate annual tax in the tax period 1999, to the extent that it exceeds the expenses related to its generation or extraordinary expenses, as well as the deductible losses.

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631.1

Tax Act (StG)

7. Change

in the temporal

assessment for

legal entities

a. Principle

b. Provisional

invoice

c. Extraordinary

income

2 Capital payments for recurring benefits, non-periodic capital gains such as income from the disposal or repayment of bonds with predominant single-period interest, and substance dividends, lottery winnings, and realised hidden reserves such as capital and revaluation gains on business assets, the dissolution of provisions, and the omission of commercially justified depreciation and provisions are considered extraordinary income.

3 For the rate of the annual tax, the total income determined according to the old Tax Act as applicable at the end of 1998 shall be used as a basis. Otherwise, however, the new social deductions and rates according to §§ 34 and 35 shall apply.

Art. 276 : Tax Law (TL) Open official source

1 Profit and capital taxes for the tax period ending in the calendar year 1999 (transitional period) shall be levied exclusively in accordance with the new law.

2 Insofar as the transitional period extends back into the 1998 tax year, the taxes for the 1998 tax year falling within this period shall be credited against the taxes calculated for the transitional period for the same period; any surplus shall not be refunded.

Art. 277 : Tax Law (TL) Open official source

1 For the calendar year 1999, a tax return completed according to the old tax law, in the version effective at the end of 1998, must be submitted.

2 Based on this tax return, but applying §§ 71, 76, and 82, a provisional assessment in the sense of § 173 para. 1 will be delivered in the calendar year 1999.

Art. 278: Tax Act (TA) Open official source

1. Extraordinary income within the meaning of para. 2, which was

earned in a business year ending in the calendar year 1998

and which, under old law, would have been taxable together with the remaining profit in

the tax year 1999, is subject to a separate annual tax in the

tax period 1999, to the extent that it exceeds the

expenditures related to its realization or extraordinary expenses, as well as the deductible losses.

2. Extraordinary income includes realized hidden reserves such

as capital gains and revaluation gains, the dissolution of

provisions, and the omission of commercially justified

depreciations and provisions.

3. The rate of the annual tax shall be determined based on the total

return resulting from the old tax law as applicable at the

end of 1998.

4. Otherwise, however, §§ 71, 76 and 82 shall apply.

92

Tax Law (TL)

Art. 280: Tax Act (TA) Open official source

1 **Appeals and Legal Remedies Procedures**

1 Appeal proceedings pending on January 1, 1999, will in every case be handled by the Cantonal Tax Office.

2 The Appeal Commissions shall take over and continue all matters pending before the Department of Finance on January 1, 1999, that fall under the jurisdiction of the Appeal Commissions according to the new law. The further procedure shall be governed by the new law. Section 282 remains reserved.

3 Appeal and complaint cases pending before the Administrative Court on January 1, 1999, will be continued by said court. The appeal or complaint procedure shall be governed by the old law.

Art. 281: Tax Act (TA) Open official source

10. **Tax Collection**

The procedure and responsibilities for tax collection, including the setting of tax rates and social deductions, for the tax years up to and including 1998 shall be governed entirely by the old law.

Art. 282a : Tax Act (TA) Open official source

29 Payments from redeemable endowment insurance policies with single premiums are taxed under § 20 para. 1 lit. a if these policies were concluded after December 31, 1998. Payments from such policies concluded before January 1, 1999 remain tax-exempt in every case.

12. Endowment Insurance Policies with Single Premiums

Art. 282b: Tax Act (TA) Open official source

29 1 Capital Gains and Revaluation Gains on Participations 13. Extension

and the proceeds from the sale of associated subscription rights pertaining to the

are not taken into account in the calculation of net income according to Sections 72 para. 2 participation deduction to

and 72a, if the participations concerned capital and

were already held by the corporation or revaluation

cooperative before January 1, 1997, and the aforementioned gains before January 1,

gains

2007 are realized. They are also not taken into account insofar as they

are attributable to a hidden contribution to the equity capital of the corporation

or cooperative, which occurred between January 1,

1997, and the beginning of the financial year ending in the calendar year 2001,

and are realized before January 1, 2007.

2 For participations that were held by the corporation or

cooperative before January 1, 1997, the tax values for profit tax

at the beginning of the financial year ending in the calendar year 1997

are considered acquisition costs.

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631.1 Tax Act (StG)

VI. Amendment

previous

Law

VII. Entry into

Force of the

new Law

3 If a corporation or cooperative transfers a participation

of at least 20 percent of the share capital or basic capital

of other companies, which it held before January 1, 1997,

to a foreign group company, the difference

between the fair market value and the profit tax value of the participation

is added to the taxable net profit. In this case, the

participations concerned continue to be part of the holdings

held before January 1, 1997. Simultaneously, the corporation

or cooperative is entitled to form an untaxed reserve

in the amount of this difference. This reserve is to be released

for tax purposes when the transferred participation is sold to a

third party outside the group, the company whose participation rights

were transferred disposes of its assets and liabilities to a substantial

extent, or it is liquidated. The corporation or cooperative

must attach to each tax return a list of the participations

for which such an untaxed reserve exists. On December 31, 2006, the untaxed reserve

is dissolved in a tax-neutral manner.

4 If participations according to Section 72, which were transferred before January 1, 1997,

at profit tax values to a corporation or cooperative taxed

according to Sections 73 and 74, are sold or revalued

within ten years, an annual tax of 6 percent of the

capital gain or revaluation gain is levied. No deductions

are granted on this gain.

Art. 284 : Tax Act (TA) Open official source

The EG to the ZGB of April 2, 19116 will be amended as follows

Art. 285 : Tax Act (TA) Open official source

This Act is subject to a popular vote. It comes into force

on January 1, 1999.

Former

Members of the

Tax Appeals

Commissions

Transitional provision in accordance with the Act on the Subordination of Tax Appeals Commissions and Building Appeals Commissions to the Administrative Court of September 13, 2010 (Official Collection of Laws 65, 960)

Art. 670: Tax Law (TL) Open official source

OR11, if the participation amounted to at least 10 percent of the share capital or nominal capital of another company or established a claim to at least 10 percent of the profits and reserves of another company. If the participation quota falls below 10 percent due to partial disposal, the reduction can only be claimed for any subsequent capital gain if the participation had a market value of at least 1 million Swiss francs at the end of the tax period prior to the sale.77

2 Capital gains and book gains due to revaluation in accordance with

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