Corporate - Significant developments

Last reviewed - 08 July 2021

Federal Act on Tax Reform and AHV (old-age and survivors' insurance) Financing (TRAF)

On 19 May 2019, the Federal Act on Tax Reform and AHV Financing (TRAF) was approved in a public vote. At the federal level, the measures of the TRAF entered into effect on 1 January 2020. The implementation of the voluntary measures of the TRAF at cantonal levels may vary from canton to canton due to the respective legislative processes.

The TRAF includes, among other things, the following main cornerstones, whereas some cornerstones must be implemented by the cantons and others can be implemented on a voluntary basis:

  • Introduction of a patent box at cantonal and communal levels (mandatory).
  • Additional deductions of up to 50% for research and development expenses (R&D super deduction) at cantonal and communal levels.
  • Abolition of the current tax privileges (see Privileged cantonal tax regimes in the Tax credits and incentives section; mandatory).
  • Regulations in relation to the transition from a privileged taxation to ordinary taxation, as well as regulations for entities that enter into and exit out of a tax liability in Switzerland (mandatory).
  • Adaption of the cantonal capital tax base for participations, patents, and loans to group companies.
  • Increase of the minimum taxation of dividend income for individuals (mandatory).
  • Restrictions to distribute capital contribution reserves for companies listed in Switzerland (federal provision).
  • Additional financing of the AHV (old-age and survivors’ insurance).

Furthermore, most cantons lowered their corporate income tax (CIT) rates and introduced lower capital tax rates or adjusted the tax base for capital tax with the introduction of the TRAF.


The Swiss Federal Tax Administration announced that no interest on late payments will be levied for all tax invoices in relation to federal tax that are due between 1 March 2020 and 31 December 2020. In addition, the Swiss Federal Tax Administration recommends benevolent treatments of requests for postponement or even waivers of tax payments due in case such payments would be very harmful to the taxpayers. At the cantonal level, the Cantonal Tax Authorities announced similar cantonal relief measures, which vary from canton to canton. Furthermore, certain cantons may offer the possibility to book a COVID-19 provision in the statutory financial statements.