Reducing Administrative Burdens in the Tax Sector: Federal Council Opens Public Comment Period

I. FOUR KEY MEASURES

The proposal focuses on four measures relating to VAT, Swiss withholding tax and issuance stamp duty

1. VAT: Annual VAT Returns Without a Turnover Threshold

Since the beginning of 2025, businesses with annual turnover of up to CHF 5,005,000 have been permitted to file VAT returns annually rather than quarterly. The draft legislation proposes to abolish this turnover threshold entirely. Consequently, all VAT-registered businesses, irrespective of their annual turnover, would be eligible to opt for annual VAT reporting. The application requirement, instalment payments and filing deadlines would remain unchanged.

2. Swiss Withholding Tax: Extension of the Notification Procedure Within Corporate Groups

The notification procedure would no longer be limited to direct parent-subsidiary relationships. Instead, it would be extended to a broader range of intra-group transactions, including companies that are fully or proportionately consolidated under recognized accounting standards. In certain cases, the procedure could also apply where the shareholding is below 10%.

3. Fewer Mandatory Filings

The current obligation to submit annual financial statements to the SFTA without request once total assets exceed CHF 5 million would be relaxed. For Swiss withholding tax purposes, financial statements would only need to be submitted where taxable distributions (such as dividends or taxable deemed profit distributions (constructive dividends under Swiss tax law)) have actually occurred. For issuance stamp duty purposes, financial statements would generally only need to be submitted upon request by the SFTA, although the authority would retain the right to request them in individual cases.

4. Issuance Stamp Duty: Easier Relief for Corporate Restructurings

The current exemption from issuance stamp duty for restructuring contributions is limited to CHF 10 million, subject to the possibility of applying for additional relief. The proposal would abolish this limitation. Both open restructuring measures and hidden restructuring measures would be fully exempt from issuance stamp duty, irrespective of the amount contributed, provided that existing losses are eliminated. The current hardship relief procedure would therefore become obsolete.

II. CURRENT STATUS AND TIMELINE

An indication of the intended direction can already be seen in the SFTA Practice Notice of 22 June 2026[2], by which the SFTA abolished the obligation for securities dealers to submit nil returns for securities transfer stamp duty purposes. The legislative proposals themselves remain at the consultation stage. Their entry into force is therefore uncertain, and the proposed amendments remain subject to the optional referendum process. Certain amendments at ordinance level could enter into force earlier. However, the extension of the notification procedure is expressly intended to become effective only once the necessary IT adaptations within the SFTA have been completed.

III. ASSESSMENT: LESS FORMALISM – NOT LESS RESPONSIBILITY

The overall direction of the proposals deserves support. Recurring and largely formalistic filing obligations consume resources for both businesses and the tax authorities without generally generating any meaningful additional information. The extension of the notification procedure is likely to provide significant liquidity benefits, while abolishing the restructuring threshold removes an unnecessary procedural obstacle for companies already facing financial distress.

A. Expansion of the Notification Procedure Within Corporate Groups

Under the current wording of the law, the notification procedure is available in particular for dividend distributions and constructive dividends within domestic and cross-border group structures. Rather than requiring the deduction of the 35% Swiss withholding tax followed by a subsequent refund, the notification procedure allows the tax obligation to be fulfilled simply by filing a notification. Despite the wording of the statute, however, the notification procedure is currently available only in direct parent-subsidiary relationships because the implementing ordinance requires a minimum shareholding of 10%. Where this threshold is not met, withholding tax on constructive dividends may currently be settled through the notification procedure only if the taxable benefit is discovered during an official tax audit It should be noted that the notification procedure is available only where it is established that the recipient of the payment is substantively entitled to a refund of the notified withholding tax. If there is any doubt – for example regarding beneficial ownership or old reserves – the withholding tax must still be levied, passed on to the recipient and default interest will accrue. Acceptance of the notification by the Swiss Federal Tax Administration does not prevent a subsequent reassessment, nor does it preclude criminal tax proceedings. Conversely, taxpayers who voluntarily pay the withholding tax lose the possibility of using the notification procedure permanently. Failure to submit a notification, or submitting an incorrect notification, may furthermore result in tax evasion proceedings carrying a fine of up to CHF 30,000 or, if higher, up to three times the amount of tax evaded. It should further be noted that an ordinary notification – i.e. one submitted outside the context of an official audit – must generally be filed within 30 days after the taxable benefit becomes due. For many years, this deadline carried significant consequences, as until February 2017 it constituted a forfeiture period. Taxpayers who filed their notification late permanently lost access to the notification procedure and became liable for default interest, then amounting to 5% of the full withholding tax, even where their entitlement to a refund was undisputed. Since February 2017, however, taxpayers satisfying the substantive requirements remain entitled to the notification procedure even if the notification is filed late, without incurring default interest. Instead of forfeiture, late filing is now punishable by an administrative fine of up to CHF 5,000.

B. The Other Side of the Coin

While the reduction of administrative burdens is clearly welcome, it is also worth considering the other side of the coin. The taxes concerned – VAT, Swiss withholding tax and stamp duties – are all based on the principle of self-assessment. Determining the relevant facts, correctly classifying transactions and remitting the tax due remain primarily the responsibility of the taxpayer rather than the tax authorities. The consultation proposal does not alter this fundamental principle. It merely reduces the frequency and density of the administrative filing obligations that have traditionally accompanied it. For taxpayers, this effectively means a shift from routine filing obligations to maintaining documentation that can be produced promptly upon request by the Swiss Federal Tax Administration. Financial statements must therefore remain readily available, even for previous tax periods, and classification errors are more likely to come to light only during targeted audits, potentially covering several years, rather than through the routine review processes that have existed until now. From a practical perspective, this means that administrative simplification should not be mistaken for a relaxation of the taxpayer's duty of care. Where existing administrative control points are removed, businesses should compensate through appropriate internal procedures, such as well-documented analyses of intra-group transactions or robust internal processes for determining whether a taxable event has occurred. Practical experience shows that the breach of what are often perceived as "merely" administrative obligations regularly results in costly consequences, including default interest, administrative penalties and, in more serious cases, criminal tax proceedings – all of which could often have been avoided with comparatively little additional effort. Businesses wishing to benefit from the newly gained flexibility would therefore be well advised to accompany it with a corresponding increase in internal vigilance. Simplifying procedural requirements does not diminish responsibility for ensuring substantive tax compliance. This observation applies equally to issuance stamp duty. The explanatory report expressly reserves cases involving abuse of law, for example excessive write-downs intended to create tax losses or incorporations with manifestly insufficient share capital followed by restructuring contributions. The more generous exemption

[1] Cf. Federal Council press release dated 19 June 2026 (see HERE).
[2] Cf. SFTA announcement of 22 June 2026 (see LINK).