On November 16, 2016 the Swiss Federal Council issued a press release announcing that it is of the opinion that it shouldn’t be possible for companies to deduct financial sanctions with a penal character and bribes for tax purposes. At its meeting of November 16, 2016 the Swiss Federal Council adopted a message on a Federal Law on the tax treatment of financial sanctions. The bill is intended to implement the motion Luginbühl "Tax deductibility of fines".
Currently Swiss law does not explicitly regulate the tax treatment of fines, penalties and financial sanctions with a penal character. In order to end the existing legal uncertainty the Swiss Parliament has asked the Federal Council to draft law that explicitly arranges that such payments are not deductible for Swiss tax purposes. The Bill as drafted by the Swiss Federal Council furthermore excludes the deductibility of bribes paid to individuals and the deductibility of expenses incurred in relation to criminal activities. Profit-taking sanctions without a penal character will remain deductible.
On September 26, 2016 the Swiss Federal Court judged that under current law financial sanctions with a penal character are not deductible for Swiss tax purposes.
Click on a language to be forwarded to the message on a Federal Law on the tax treatment of financial sanctions as available on the website of the Swiss Government in that language. (German or French)
Click on a language to be forwarded to the proposal for a Federal Law on the tax treatment of financial sanctions as available on the website of the Swiss Government in that language. (German, French or Italian)
Click on a language to be forwarded to the results of a consultation regarding a Federal Law on the tax treatment of financial sanctions as published on November 16, 2016 on the website of the Swiss Government in that language. (German, French or Italian)
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