From the M&A perspective, the taxation of Swiss holdings is of particular interest, as normally the cross-border acquisition of a target company is effectuated by way of a special purpose vehicle (SPV) in the form of a Swiss (holding) company. In many cases, the SPV is not merged with the target company right away (often to avoid a partial indirect liquidation or because the tax authorities deny a debt push-down). Although pursuant to the proposed reform a holding company will become subject to ordinary statutory taxation, the participation exemption on qualifying dividend income and capital gains will remain. As a result, a pure holding company's profits will continue to be taxed marginally or not at all. The cantons will likely also provide for a reduced tax on equity. This means that, even after implementation of the corporate tax reform III as proposed, Switzerland will remain a very attractive holding jurisdiction.