The Swiss Federal Council and other governmental bodies react to the raising challenges from the COVID-19 global outbreak. Next to loan guarantees, short-time work and other reliefs, tax payment and filing deadlines are extended. Cantonal Tax Authorities are following suit.
In order to provide companies with liquidity during the crisis, the Federal Council agreed to reduce late payment interest rates to 0% for VAT, Customs duties, other consumption taxes (tobacco, beer, vehicles, fuel and mineral oil taxes) and the Direct Federal Tax, valid until end of 2020. In the case of Direct Federal Tax, this interest reduction applies to taxes becoming due between 1 March 2020 and 31 December 2020. In principle, payment deadlines remain legally binding and deferrals are granted upon request, whereas for Direct Federal Tax the cantonal tax authorities are responsible and first point of contact. The Federal Tax Administration has provided them with guidance through a circular published on 24 March 2020, detailing the application of the Federal Council’s COVID ordinance in the remit of Direct Federal Tax.
Filing deadlines for VAT, customs duties and consumption taxes remain in place and should be observed. Please see below for income tax returns.
While it remains unclear at which level of scrutiny the tax authorities will review the applications for deferrals or instalment plans, and in particular the substantiation of “significant hardship” generally required for the application, they have been asked to grant deferrals with utmost tolerance.
The Swiss cantons are following suit with their own specific measures applying to state and communal tax as well as other payments and obligations, whereas currently the following has been observed. It should be noted that many tax authorities have announced measures and will be communicating these in the upcoming days.
For any open tax payments, instalment payment plans and deferred payments are to be explored (open/final), even if no specific mention has been made by the cantons with regard to COVID-19. These possibilities were given even before the COVID-19 global outbreak and should always be considered. The current expectation is that such will be granted without complications, as the tax offices have been repeatedly asked to offer flexibility in this area, as long as a connection to financial hardship because of COVID-19 can be established. However, late payment interest may apply in cantons, where no pertinent measures have been implemented, yet.
Tax payers who are aware that their forecasted taxable profit will decrease significantly are well advised to request updated provisional invoices for reduced payments. A claim for payout of tax refunds due for prior tax years should be analyzed, as well, as tax offices have indicated they will operate such payouts even before the tax years are finally assessed.
Finally, for stamp duties and withholding tax no measures have been taken at this point in time. The late payment interest of 5% remains in place for due payments.
Availability of tax authorities
All tax authorities have committed to continue operating in these difficult times, while short-term disruptions are likely. In general, their hotlines and general contact numbers may be congested and they recommend to initiate first contacts through online contact forms or e-mail. Most cantons have decided to close their counters and therefore ad hoc physical contact and meetings may not be possible for the time being.
Other countries are also implementing measures to support businesses and their economies. Here, as well, updates are received regularly and you may refer for the latest status here.
Other measures taken by the governments and authorities include:
- Extended scope and reduced waiting times for short-term working compensation
- Loan programs by banks with federal or cantonal guarantees in addition to existing guarantee programs through dedicated cooperatives
- Temporary debt collection holidays until 4 April, which complement the ordinary debt collection holidays until 7 days after Easter
- Interest-free deferral of social security contribution payments to the compensation funds
- Compensation of loss of income to self-employed individuals and owners of businesses
- Specific measures for cultural institutions, sports organizations, the tourism sector and the likes
EY’s subject matter experts are evaluating these options on an ongoing basis and are there for you. Please contact us anytime.
More to come
We are communicating in a fluent landscape and updates are received on an ongoing basis. For up to date and most current information we invite you to contact us anytime and return here for updates.