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Capital Contribution Principle

December 2010

From 1 January 2011 the ‘capital contribution’ principle will apply in Switzerland. This will have a positive impact on Swiss domiciled listed companies and on Swiss resident private investors, as it leads to a withholding tax-free and income tax-free repayment option of paid-in share premium and of other previously made contributions. However, share premium and other contributions which have been made since 1997 must be specially accounted for in the statutory accounts as reserves from capital contributions. These reserves must be notified to the Swiss federal tax authorities 30 days after acceptance of the financial statements by the general assembly in order to be entitled to a tax-free repayment.

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