Swiss Companies Milestones

Types & Structure, National & Cantonal taxes, European Union Treaties and Bilateral Taxation Treaties

A. Preamble
B. Swiss Companies’ types
B1. SA -Swiss Joint stock Corporation and the LLC – Swiss Limited Liability Company
C. Incorporation – registration procedure
D & D1 ( SA and LLC accordingly ) , advantages and Steps to incorporate
E . Public register
F. Taxation matters
G. Swiss company law recent amendments in force
Η. Switzerland – European Union Treaties
K. Switzerland – Greece Double Taxation treaty
K1. Switzerland – Australia Double taxation treaty

A. Preamble

Switzerland is one of the best countries in which to form a company. The framework conditions are extremely favorable. The legal and tax system offer many advantages, its political stability is recognized, corporate tax is low, Swiss towns are often said to be among the world’s most pleasant, the quality of life is excellent, productivity is high, infrastructures are modern and high performance, labor law is flexible and Switzerland is strategically located at the centre of Europe.

Switzerland is divided in many cantons so when establishing a company the founder has to choose the related canton taking into account some parameters like ,for example, the business friendly environment, perhaps the language since, apart of the widely spoken English ,depending on the specific canton ,French , Italian and German languages are spoken as original languages and finally the tax rate which varies from canton to canton .( for a full list of the Swiss cantons and the according tax rate please refer to section F )

B. Swiss Companies’ types

In Switzerland, the four most common types of company are the GmbH, the AG, the Holding company and the Branch office( the latter technically not  a company)

The LLC (limited liability company): It offers limited liability protection for the owners, which means that the debts of the business are not personal to the owners. The LLC is also advantageous in terms of paid up capital as the minimum is CHF 20’000.

The SA (société anonyme), Swiss stock corporation or Swiss joint stock company. It is often used for large-scale businesses that require significant capital. The SA also offers limited liability protection for the owners, but is a bit more complex to set up than a LLC. The SA is subject to a more important paid -up capital as the minimum is CHF 100’000.

The Swiss holding company is a legal structure used to hold shares in other companies. It allows a company to hold stakes in several companies without having to create several separate legal structures. The advantages of a holding company are related to asset and risk management. The owners of a holding company have limited liability for the activities of their subsidiaries, which means that the debts of the subsidiary are not personal to the owners of the holding company.

The Swiss branch office is an additional option for entrepreneurs seeking to create a presence in Switzerland. A branch office is a subsidiary of a foreign company that has a physical presence in Switzerland. It is considered an extension of the foreign company rather than a separate legal entity.

B1. SA - Swiss Joint stock Corporation and the LLC – Swiss Limited Liability Company

The  Limited Liability Company, in German  the  Gesellschaft mit beschränkter Haftung (GmbH) , the Ltd , and  the Stock corporation Aktiengesellschaft (AG) , the SA .

Share Capital

The minimum share capital for a Stock corporation , called Aktiengesellschaft (AG) in German, or Société Anonyme (SA) in French, is CHF 100,000.

The  limited liability company, called Gesellschaft mit beschränkter Haftung (GmbH) in German, or Société à résponsabilité limité (Sàrl) in French, legally requires a minimum capital and a minimum paid-up capital of CHF 20,000. There are no provisions regarding maximum capital but a 1% stamp duty will be due on capital contributions exceeding 1 million Swiss franc.

Paid up capital

At least the legally required minimum paid-up capital has to be deposited in full into an escrow account with a Swiss bank before the incorporation can take place.

Directors

At least one of the directors or officers with sole signatory right, or two directors or officers with joint signatory right respectively of a stock corporation or of a limited liability company must be resident in Switzerland. In case of lack of such personds of the owners’ choice the corporate provider can provide directors of Swiss residency acting under the guidance and orders of the company owner/s.

Auditing

In principle the financials of stock corporations and of limited liability companies have to be audited annually by an independent auditor. If the stock corporation or the limited liability company is not subject to mandatory ordinary audit, the shareholders of a stock corporation or the members of a limited liability company may waive the appointment of statutory auditors as long as the company does not have more than 10 fulltime employees. Such waiver remains valid for the subsequent financial years. However, each shareholder remains entitled to request the conduct of an audit review and the appointment of statutory auditors by the tenth day prior to the general shareholders’ or general members’ meeting, respectively, in the latest.

Shares

The shares of a stock corporation are freely transferable unless such action is restricted by the company’s statutes. Limited liability companies require every change of shareholder to be recorded by written agreement and to be approved by the meeting of shareholders.

Listing to the public register

Shareholders of a stock corporation are not listed in the public register, while shareholders in a limited liability company are.

If a company needs capital of at least CHF 100,000 for the purpose of its operations in any case, then it is most rational to incorporate it as a stock corporation. If it is important to minimize the capital requirements then a limited liability company is preferable as it requires a lower minimum capital.

In Switzerland, the tax situation is practically the same for both company types. However, consideration should also be given to the foreign tax treatment of the different corporate forms; a limited liability company may be treated differently from a stock corporation for tax purposes under foreign tax law.

D and D1

D. Advantages of the SA

Bearer shares make share transfers easier. The company is benefited  from favorable international tax treaties.

Steps to incorporate an SA

• Choice of the desirable Swiss canton to incorporate the company
• Choice and verification of the availability of the desirable company’s name at the Companies Registry Office. A Société Anonyme (Public Limited Company) must be registered in the Companies Registry at the place of the registered office.
• Opening of an account for depositing the share capital(min. CHF 50,000) pending filing with the Companies Registry. A deposit declaration will be provided once the sums have been paid in.
• Signing of the original incorporation deed in front of a Notary. This deed will contain the articles of association and appoint the governing bodies. The notary will take responsibility for the statutory steps and obligation for public disclosure.
• Opening of the company’s bank account.

D1. Advantages  of the LLC

Favorable international tax treaties and other tax benefits

Steps to incorporate an LLC 

• Choice of the desirable Swiss Canton to incorporate the company
• Choice and Verification of the availability of the desirable company’s name at the Companies Registry Office.
• Opening of an account for depositing the share capital(min. CHF 20,000 ) pending filing with the Companies Registry. A deposit declaration will be provided once the sums have been paid in.
• Signing of the original incorporation deed in front of a Notary. This deed will contain the articles of association and appoint the governing bodies. The notary will take responsibility for the statutory steps and obligation for public disclosure.
• Opening of the company’s bank account.

E. Swiss Trade Register and the procedure for registration

The Swiss Trade Register is the organization that holds the details of each company's registered address. The Commercial Register of Switzerland is referred to as Handelsregister, or HR, and holds information on all the business types in Switzerland, along with their address, shareholders and other information. If an investor needs to know if a brand name is already taken, they should head to the Federal Commercial Registry Office and enquire.

Formation of a company in Switzerland requires a shareholder meeting with a public notary in attendance. Following that meeting, an application is required to be filled in and submitted to the Commercial Register office in the district that the company is located. Other documents besides the application may also be necessary, such as a deed of incorporation, a copy of the articles of association which has been certified and declarations from board members and auditors. Any members which are allowed to act on behalf of the company being registered must all sign an agreement of registration for the company with the Trade Register in Switzerland. Succeeding registration from the Commercial Registry in Switzerland, a notice will be published within the Swiss Official Gazette of Commerce. Company formation Switzerland should normally be less than two or three weeks

F. Brief reference to the Swiss taxation system

1. The taxation rates of the Swiss cantons are:

• Zug   11.85
• Nidwalden 11.97
• Luzern 12.20
• Glarus 12.31
• Uri 12.63
• Appenzell AI 12.6
• Obwalden 12.74
• Appenzell AR 13,04
• Basel BS 13,04
• Thurgay 13,21
• Neuenburg 13,57
• Schaffhausen 13,80
• Freiburg 13,87
• Genf 14,00
• Waadt 14,00
• Schwyz 14,06
• St. Gallen 14,40
• Graubünden  14,77
• Solothurn 15,29
• Jura 16,00
• Wallis 17,12
• Aarau 17,42
• Basel BL 17,97
• Tessin 19,16
• Zürich 19,65
• Bern 21,04
• (Plus a 11.000 CHF approx. direct federal tax)

2. The Swiss tax system is highly consistent with the country's reputation as a center for international trade and finance and there are very few restrictions on Swiss investments abroad. Normal corporate tax rates are already low in an international comparison.

Indicatively , as an example ( check tax rates of each canton above) , the overall taxation level in canton Zug is approx. at 13.5% on income after tax, resulting in an effective income tax rate on income before tax of 12% ,  because in Switzerland, the tax payable can be considered a business expense and can therefore be deducted from income like all other business expenses.

Swiss companies with substantial participations obtain tax relief at both federal and cantonal/communal level. The reduction is calculated according to the proportion of net income from qualifying participations in the total net income of the company. Qualifying income includes dividends received from participations of a minimum of 10% of the capital or of CHF 1 million at a fair market value, and capital gains realized on participations held for at least one year if a minimum of 10% is sold. Such pure holding companies pay income tax at an effective tax rate of a mere 11.9% only on the income not qualifying for the participation exemption. Another reason for the popularity of Swiss holding companies results from the fact that Switzerland has no subject to tax conditions (or other CFC regulations) with respect to the subsidiaries held by a Swiss holding company.

With respect to the use of Swiss companies in an international context, it is very important to consider the impact of the Swiss withholding tax on dividends before establishing a Swiss company. A federal withholding tax of a relatively high 35% is levied on all dividends and profit distributions made by Swiss-resident companies, unless a tax treaty is applicable. However ,where a tax treaty is applicable and the receiver satisfies the ultimate beneficial owner test, a reimbursement of the excess Swiss withholding tax will be granted on the basis of the applicable rules. It is possible to apply for a notification reporting procedure regarding Swiss dividend withholding tax, instead of the usual deduction at source and reimbursement procedure.

Switzerland currently has double tax treaties with more than 100 countries and most treaties decrease the effective Swiss withholding tax to 0%, 5% (for companies) and 15% (for individuals).

The attractiveness of Switzerland is further enhanced with the application of the EU Parent- Subsidiary Directive and the EU Interest and Royalty Directive to Swiss companies. This reduces the Swiss withholding tax on dividend distributions to parent companies in all European countries to 0%.

Switzerland does not levy withholding taxes on royalties, management fees, license or service fees and inter-company interest payments. A 35% withholding tax on interest payments is applicable only to certain debt instruments issued by a Swiss-resident lender (i.e. bonds, bond-like loans and interest paid by banking institutions to non-banks).

The Swiss tax system mirrors Switzerland’s federal structure, which consists of 26 sovereign cantons. Based on the constitution, all cantons have full right of taxation except for those taxes that are exclusively reserved for the federal government. As a consequence, Switzerland has two levels of taxation: the federal and the cantonal/communal level.

The reform of the income tax system implemented in recent years provided for harmonization of the formal aspects of the various cantonal tax laws, for example, determination of taxable income, deductions, tax periods, and assessment procedures. The cantons and municipalities still have significant autonomy for the quantitative aspects of taxation, however, particularly with respect to determining the applicable tax rates. Consequently, the tax burden varies considerably between cantons/ municipalities.

3. Taxation of corporate payers, Corporate Income Tax – Federal Level .

Taxable Persons: Taxable persons include Swiss resident legal entities, i.e. Swiss stock corporations, limited liability companies, and partnerships limited by shares, cooperatives, clubs and foundations, and collective investment schemes with direct ownership. Companies which have their registered office or place of effective management in Switzerland are generally considered resident for tax purposes.

Taxable Income: Resident companies are subject to corporate income tax on their worldwide income with the exception of income attributable to foreign permanent establishments or foreign real estate (immovable property). Such income is excluded from the Swiss tax base and is only taken into account for rate progression purposes in cantons that still apply progressive tax rates. Non-resident companies are subject to tax only on Swiss source income, i.e., income and capital gains derived from Swiss business, permanent establishments, or immovable property, whereas income from immovable property includes income from trading in immovable property. As a matter of principle, the legally prescribed/statutory accounts of a Swiss company and – in the case of a foreign company the branch accounts – form the basis for determining taxable income. With the exception specific tax adjustments, expenditures recorded pursuant to commercial law are therefore tax deductible, provided that they comply with the dealing-at-arm’s-length principle. Revenues from qualifying shareholdings (dividend returns and capital gains) constitute indirect tax exemptions. For tax purposes, losses can generally be carried forward for a maximum of seven years.

Thin Capitalization Rules: The Swiss Federal Tax Administration has issued safe harbor rules for thin capitalization purposes that apply to related party debt. Third-party financing is not affected by these rules. Specifically, a unique asset-based test is used to determine whether a company is adequately financed. The thin capitalization rules require that each asset class must be underpinned by a certain minimum equity portion (generally expressed as a prescribed percent of the fair market value but often the lower book values suffice). Related-party liabilities exceeding the allowable debt are classified as equity and added back to the taxable capital within the context of the cantonal/communal annual capital tax. Moreover, the allowable interest deductibility on debt is determined by multiplying the allowable debt by the safe harbor interest rates. If interest payments to related parties exceed the amount which can be paid based on the allowable debt, they are added back to taxable profit if market-related prices cannot be proven on an armʼs length com- parison. In addition, such excessive interest payments are regarded as hidden dividend payments, which are subject to withholding tax.

Corporate Income Tax – Cantonal and Municipal Level: Due to the harmonization of cantonal and municipal taxes, most of the aforementioned profit determination regulations apply analogously on a cantonal and municipal level.

Overview of ordinary profit tax rates: Combined effective income tax rates (for direct federal and for cantonal and local taxes) for properly taxed companies approximately  are between 11.9% and 21%, depending on the canton and municipality.

Special Tax Regimes: In contrast to the Swiss federal tax law, all cantonal tax laws provide special tax regimes, in addition to the direct federal tax, which may be obtained provided that the legal conditions of the tax harmonization law are met.

Reduction of corporate income tax rates: In the course of the tax reform, corporate income tax rates were lowered in most cantons. In some cases, cantons that formerly had high corporate income tax rates compared to Switzerland overall made significant reductions.

Relief limit: The cantons must set a limit for the relief from all replacement measures (with the exception of the special rate solution). The maximum relief must not exceed 70% of profits, but the cantons are free to set a lower relief limit.

Capital Tax: Annual capital tax is only levied at cantonal/communal level. The basis for the calculation of capital tax is in principle the company’s net equity (i.e. share capital, paid-in surplus, legal reserves, other reserves, retained earnings). The taxable base of companies also includes any provisions disallowed as deductions for tax purposes, any other undisclosed reserves, as well as debt that economically has the character of equity under the Swiss thin capitalization rules. Some cantons provide for crediting the cantonal corporate income tax against capital tax. The tax rates vary from canton to canton.

Tax Relief: Tax relief can be granted at cantonal and communal level and in explicitly defined regions at federal level for qualified new investments for up to 10 years.

Federal Level: The federal government has defined economically weaker regional community centers and regions which are entitled to grant business incentives including partial or full corporate income tax breaks for up to 10 years Tax breaks are provided for investment projects that meet certain requirements. Besides the creation of new production-related workplaces or investing, these also include conditions, for instance, that a competitive situation among existing companies should not arise.

Cantonal and Municipal Level: Most cantons offer partial or full tax breaks for cantonal/communal tax purposes for up to 10 years on a case-by-case basis. In particular, incentives may be obtained for creating a new presence or for an expansion project with particular economic relevance for the canton. Practice differs in the individual cantons. Most importantly, however, business incentives are generally granted in connection with the creation of new jobs locally, i.e. requirement of at least 10 to 20 new jobs in most cantons.

Taxation of individuals  especially in the view of  withholding tax: Thanks to a number of double taxation treaties and bilateral agreements, tax payers resident outside of Switzerland can be reimbursed for all or part of their withholding tax.

Domestic Rates: The tax rate applied on dividend distributions including deemed profit distributions and interest payments relating to bonds
and bond-like debt instruments as well as on interest payments made by banks or bank-like institutions to non-banks is 35%.

No withholding tax is levied on interest payments for corporate credit agreements that do not qualify as bonds or bond-like debt instruments. There is no withholding tax on interest payments relating to qualifying ordinary company loan agreements. Provided that royalties, licenses, and service and similar fees payable by Swiss individuals or corporations are at armʼs length, no withholding tax is levied.

Treaty Rates: Most double taxation treaties provide for a reduction of the normal 35% rate on dividends. The reduced rate is usually 15% for portfolio investors and 0%, 5%, or 10% for substantial corporate owners. Some treaties require the taxation of Swiss-source income in the recipient’s country of residence. Otherwise no relief will be granted. With regard to interest income, most treaties allow for a reduction as well, typically up to 10%. In some treaties a full refund is granted. However, a reduction is only possible if the person applying for treaty benefits is actually entitled to claim the treaty.

Bilateral Agreements with the EU: In May 2004, Switzerland and the European Union (EU) concluded eight bilateral agreements (“Bilateral Agreements II”) in addition to the seven existing bilateral agreements (“Bilateral Agreements I,” in force since June 1, 2002). One of the agreements is the Savings Tax Agreement providing for measures equivalent to those laid down in the EU Savings Tax Directive. To entice Switzerland to enter into the Savings Tax Agreement, the same agreement also incorporated language that was practically identical to the version of the EU Parent/Subsidiary Directive and the EU Interest/Royalty Directive in effect at that time. Accordingly, dividend, royalty, and interest payments between Switzerland and the member states of the EU have not been subject to withholding tax since July 1, 2005, provided conditions such as minimum shareholding and holding period are fulfilled. As of 2017/18, the Interest Taxation Agreement was replaced by the Agreement for the Automatic Exchange of Information on Tax Matters (AIA Agreement). This not only includes interest returns but all types of capital returns and also trusts and foundations. The withholding tax exemption of cross-border payments of dividends, interest, and royalties between affiliated companies enshrined in the Savings Tax Agreement will continue to apply. The application of the above-mentioned benefits from the AIA Agreement can be denied in cases of abuse or fraud because of the explicit reservation made in the AIA Agreement as to the use of domestic or agreement-based provisions for the prevention of fraud or abuse, both by Switzerland and by the individual EU member states. Double tax treaties between Switzerland and EU member states with more favorable tax treatment of dividend, interest, and royalty payments remain unaffected. In practice, this means that taxable persons can choose between reference to the AIA Agreement or the applicable double taxation treaty.

Value added Tax: Although Switzerland is not an EU member state, its value-added tax (VAT) system was structured in accordance with the sixth EU VAT Directive (“Sixth Council Directive on the harmonization of the laws of the Member States relating to turnover taxes” whereby turnover refers to revenue) as a non-cumulative, multi-stage tax that provides for deduction of input tax. As a result, Swiss VAT is levied as an indirect tax on most goods and services at the federal level only and applies to each stage of the production and distribution chain. It is designed as a tax owed by the supplier of goods or services (i.e., the tax liability is based on the payment made by the recipient of the goods or services).

Taxable Persons: Any legal entity or individual, establishment, partnership without legal capacity, institution, etc. that operates an enterprise (obtains revenues for a long period of time through independent commercial or professional activity and appearance in one’s own name) is essentially liable for tax. There is a VAT registration obligation if global taxable turnover exceeds 100,000 Swiss francs per year. All domestic establishments of a Swiss corporation form one taxable entity together with the headquarters. All domestic establishments of a foreign corporation are also classed as one taxable entity. On the other hand, the domestic establishments and the foreign headquarters are each considered a separate taxable entity. A so-called acquisition tax obligation (no VAT registration obligation) also exists for recipients within Switzerland who are not liable for taxation, provided that, within the calendar year, they acquire services subject to acquisition tax amounting to a total of more than 10,000 Swiss francs. Such services include those acquired from non-resident enterprises that are not entered in the register of taxable persons, provided that the place of service provision in accordance with the recipient location principle is the domestic market, with the exception of telecommunications or electronic services for recipients not liable to taxation. Recipients liable for taxation are also subject to the acquisition tax obligation. They must declare acquisition tax within the context of their regular value added tax calculations. If the revenues of a taxable entity (global turnover from taxable supplies and services) amount to less than 100,000 Swiss francs within the year (for sport and cultural associations and charitable institutions 150,000 Swiss francs), it is exempt from the tax obligation. However, any such entity may also waive exemption from tax liability. Upon registration with the Swiss Federal Tax Administration, the taxpayer receives a VAT number that is essentially based on the company identification number. VAT is added to the company identification number .

A special regulation exists for holding companies: In general, the acquisition, holding, and selling of shareholdings is a commercial activity within the meaning of Swiss VAT legislation. Shares of capital in other companies amounting to over 10% are classed as shareholdings, which are held with the intention of long-term investment and have a considerable influence. Holding companies would generally not be subject to value added tax, as their turnover usually comes from shareholdings and does not therefore fall under taxable supplies. The qualification of the holding activity as a commercial activity means, however, that the holding company can be voluntarily registered for value added tax due to the waiving of the exemption from tax.

The advantage of registration is that input tax claims can be asserted, which accrue within the context of their commercial activity providing an entitlement to input tax deduction. Exempt services for which no tax option is taken or can be taken do not provide an entitlement to input tax deduction. In the area of monetary and capital transactions, for example, trading in securities and shares in corporations is a service exempt from taxation, for which an input tax correction is necessary.

Double tax treaties

To minimize the effect of double taxation in Switzerland and abroad, Switzerland has concluded tax treaties covering direct income taxes with all major industrial countries and many other countries. Most of these treaties are patterned on the principles of the OECD model convention, which defines where the income or the assets are to be taxed and also describes the method for the elimination of double taxation. Switzerland essentially applies the tax exemption method, exempting income allocable to a foreign country from taxation in Switzerland. The respective income and assets are only considered for the calculation of the applicable tax rate (progression). For certain income streams (dividends, interest, and license fees), Switzerland by contrast generally applies the crediting method. For dividends, interest, and license fees, both states – the state in which the income is earned and the state of the recipient’s residence – are typically entitled to tax them. However, the double tax treaty limits the right of taxation of the source state, and the source tax can be credited against the tax levied in the recipientʼs state of residence. To date, more than 80 tax treaties are in effect, plus also the EU bilateral agreements . As Swiss tax treaties are treated as international conventions, they generally supersede federal as well as cantonal/ municipal tax rules. Swiss double tax treaties apply to persons (individuals or companies) who are resident in one or both of the contracting states. Apart from the tax treaties covering direct income taxes, Switzerland also concluded a few tax treaties in the area of inheritance and estate tax. Switzerland has not negotiated any double tax treaties concerning gift taxes so far. Furthermore, there are some special treaties relating to cross-border commuters, taxation of international air and transport services, and the tax situation of international organizations and their staff.

G. Swiss company law recent amendments in force

Share capital
The general meeting of shareholders of both public and private limited liability companies (the Aktiengesellschaft, or AG and the Gesellschaft mit beschränkter Haftung, or GmbH) are allowed to change the currency of the capital of the respective AG or GmbH in a permissible currency, such as USD, EUR, GBP or JPY. The accounting and financial reporting must be done in the same chosen currency of the share capital. In order to change the currency of the capital, the articles of association of the AG or GmbH will need to be amended by means of a notarial deed. It must be noted that the share capital needs to still equal at least the minimum capital of an AG, namely CHF 100,000 or a GmbH, namely CHF 20,000.

Place of general meeting of shareholders
Furthermore, it is allowed to hold General Meetings of Shareholders physically and/or (partly) virtually, or by written circular resolution. If certain formalities have been met, also be possible to hold a general meeting of shareholders abroad. In order to hold a general meeting of shareholders virtually or abroad, an amendment of the articles of association of the AG or GmbH is required.

Authority of the general meeting of shareholders
Aside the current authority of the general meeting of shareholders, the following matters are attributed to the authority of the general meeting of shareholders: (i) the introduction of a capital band; (ii) the change of currency of the share capital; (iii) the introduction of the casting vote of the chairman in the general meeting of shareholder; (iv) the introduction of a provision in the articles of association concerning the holding of the general meeting of shareholders abroad; (v) the introduction of an arbitration clause in the articles of association; (vi) the waiver of the appointment of an independent proxy for the holding of a virtual general meeting of shareholders for companies whose shares are not listed on a stock exchange.

Contribution via offsetting
The contribution may also be made "by offsetting against a claim", the so-called contribution in kind. The "offsetting against a claim" also counts as "cover" if "the claim is no longer covered by assets”. In other words: a receivable that is not recoverable can in principle be offset. It is now mandatory to include offsetting contributions in the articles of association. Thus, not only the amount of the claim brought for to be offset, but also the name of the shareholder and the shares issued for it must be stated. The general meeting of shareholders may repeal the provisions of the articles of association after ten years. This form of inclusion was already known for the contribution in kind and the acquisition in kind and is now also applied for the offsetting contribution. Additionally, according to the new law, the articles of association are to be made accessible free of charge on the internet, which significantly enhances the impact of publication in the articles of association. The provisions on the written accountability report of the founders or the board of directors on the existence and offset stability of the debt remain unchanged. This report must be audited by a licensed auditor who must confirm in writing that the report is complete and correct.

Interim distributions
The new company law provides that interim dividends may be distributed .
A basis in the articles of association is not required for this. The procedure must be carefully followed because as interim dividends entail the risk of withdrawing funds from the company even though the operating business is already performing poorly,
interim financial statements must be prepared in advance. The interim financial statements must be prepared in accordance with the provisions governing the annual
financial statements and shall contain a balance sheet, an income statement and an annex. However, the law permits certain simplifications or reduced requirements,
provided that this does not impair the presentation of the course of business. When determining the interim dividend, allocations to the statutory and voluntary reserves
must be made in advance. The interim financial statements must in principle be audited by the auditors prior to the resolution of the shareholders' meeting, otherwise the resolution
of the shareholders' meeting is null and void. If the company is subject to neither the ordinary
nor the limited audit obligation there is no duty to audit. Moreover, the duty of due diligence should prohibit the board of directors from proposing an interim dividend to the
shareholders' meeting if this would jeopardize the company's required liquidity.

Legal reserves / accounting rules
The classification of the equity positions on the balance sheet is harmonized with the accounting provisions of the Code of Obligations that entered into force ten years ago. The liability side of the balance sheet thus has to be structured in a following way: (i) share capital, (ii) statutory capital reserves, (iii) statutory profit reserves, (iv) voluntary profit reserves, (v) profit carried forward (vi) annual profit. In case of dividend distribution, the mandatory profit allocation to legal reserves (up to 50% of the share capital or 20% in case of holding companies) from retained earnings is simplified by abolishing the so-called “second allocation”. The motions to, and minutes of, the annual shareholders' meeting should reflect the new denomination of the equity positions where not yet implemented. A repayment of capital contribution reserves should no longer be labelled as “dividend" in the minutes, however as “repayment".

Η. Switzerland – European Union Treaties

Switzerland and European Union have signed many treaties regarding many topics that in some cases partially bring Switzerland in almost the same position with the EU countries , ie regarding the free movement of people and goods , taxation etc

Especially , regarding taxation ,The agreement between Switzerland and the European Union (EU) on the automatic exchange of information (AEOI) in tax matters is helping to combat cross-border tax evasion. The agreement has been in force since 2017 and is applicable between Switzerland and all EU member states. It implements the global standard on AEOI of the Organization for Economic Co-operation and Development (OECD).

In 2004, Switzerland and the EU concluded a taxation of savings income agreement as part of the Bilaterals II agreements aiming at combating cross-border tax evasion. This was replaced by the agreement between Switzerland and the EU on the automatic exchange of financial account information in tax matters, which was signed on 27 May 2015. The new agreement implements the OECD global standard on AEOI, which Switzerland committed to in 2014. In this context, Switzerland and all of the EU member states have been collecting information on financial accounts since 2017, and have been exchanging this data since 2018.  By implementing the global AEOI standard, Switzerland and the EU are making an important contribution to the prevention of cross-border tax evasion and increasing tax transparency.

A Chronology of treaties signed is provided below (working backwards) :

Since 2018

• Information exchange on financial accounts as per AEOI Agreement

2017

• Entry into force of the AEOI Agreement (01.01.2017)

2016

• Approval by Parliament (17.06.2016)

2015

• Signing of the AEOI Agreement (amending protocol to the Taxation of Savings Income Agreement) (27.05.2015)

2005

• Entry into force of the Taxation of Savings Income Agreement (01.07.2005)

2004

• Approval by Parliament (17.12.2004)
• Signing of the Taxation of Savings Income Agreement (in the framework of Bilateral Agreements II) (26.10.2004)

Practically since 2004 ,

In 2004, Switzerland and the EU concluded a taxation of savings income agreement as part of the Bilateral II agreements. This was replaced by the agreement between Switzerland and the EU on the automatic exchange of financial account information in tax matters, which was signed on 27 May 2015. The new agreement implements the OECD global standard on AEOI, which Switzerland committed to in 2014. In this context, Switzerland and all of the EU member states have been collecting information on financial accounts since 2017, and have been exchanging this data since 2018.  By implementing the global AEOI standard, Switzerland and the EU are making an important contribution to the prevention of cross-border tax evasion and increasing tax transparency.

K. Switzerland – Greece Double Taxation treaty

Switzerland and Greece signed a revised double taxation agreement (DTA) in the area of taxes on income and capital. The DTA also contained provisions on the exchange of information which were negotiated in line with the parameters decided by the Federal Council and are in accordance with the OECD standard. The first DTA between the two countries was signed in 1963 , that treaty was replaced by the new one one of 1983 ratified in Greece by law 1502/84 , later in 2010 a new treaty was signed in Bern by the two countries which was ratified by Greece in 2011 ( law 4034/2011) , on top of that another protocol was signed to amend the treaty ( law 4105/2013)

K1. Switzerland – Australia Double taxation treaty

On 14 October 2014, the new income tax treaty between Australia and Switzerland entered into force. The treaty, signed 30 July 2013, replaces the 1980 tax treaty between the two countries.

Taxes covered: The treaty covers Australian income tax, fringe benefits tax and resource rent taxes. It covers Swiss federal, cantonal and communal taxes on income and capital.

Withholding tax rates : Dividends: The Withholding tax rate on dividends is 5% if the beneficial owner directly holds at least 10% of the paying company's voting power (Australia) or capital (Switzerland), otherwise 15%. Dividends are exempt from withholding if the beneficial owner has directly or indirectly held at least 80% of the paying company's voting power (Australia) or capital (Switzerland) for at least a 12 month period ending the date the dividend is declared, and

• The beneficial owner its principal class of shares listed and actively traded on a recognized stock exchange, as set out in the treaty; or

• The beneficial owner is directly or indirectly owned by a one or more companies:
  • Whose principal class of shares listed and actively traded on a recognized stock exchange, as set out in the treaty; or
  • Each of which would be entitled to equivalent benefits under a tax treaty if it directly held the shares in respect of which the dividends are paid; or
• The competent authority of the dividend paying State may grant the benefit if neither of the above requirements are met, but the beneficial owner has not become resident of a Contracting State for the main purpose of gaining the treaty benefits

Dividends will also be exempt from withholding tax if the beneficial owner directly holds no more than 10% of the paying company's voting power (Australia) or capital (Switzerland), and is:

• A Contracting State or political subdivision
• A central bank of a Contracting State
• An Australia resident deriving such dividends from the complying superannuation activities
• A Swiss a pension scheme whose investment income is exempt from Swiss tax

Interest: The withholding tax rate on interest is 10%. However, interest will be exempt from withholding tax if the interest is paid to a beneficial owner that is unrelated to the interest payer, including:

• A Contracting State or political subdivision
• A bank performing central bank functions in a Contracting State
• A financial institution, except for back-to-back loans or similar arrangements
• An Australia resident deriving such interest from complying superannuation activities
• A Swiss a pension scheme whose investment income is exempt from Swiss ta

Royalties: The withholding tax rate on royalties is 5%.

Capital gains: Capital Gains are generally exempt from withholding, although a Contracting state may apply domestic rates in the case of gains from the alienation of immovable property located in the State, movable property forming part of the business property of a permanent establishment in the State, and shares deriving more than 50% of their value directly or indirectly from immovable property in the State

Double taxation relief: Australia applies the credit method for the elimination of double taxation, while Switzerland generally applies the exemption method. However, in the case of dividend, interest and royalty income, Switzerland may apply the credit method.

Limitation on benefits: A protocol to the treaty, signed the same date as the treaty, includes a limitation on benefits provision whereby the benefits of the treaty will not apply if gaining the treaty benefits is one of the main purposes of any person concerned with the creation or assignment of the property or right in respect of which the income is paid, or one of the main purposes of a taxpayer becoming resident of a Contracting state

The treaty applies in Australia from 1 April 2015 regarding fringe benefits tax, from 1 January 2015 regarding withholding taxes, and from 1 July 2015 regarding other taxes. The treaty applies in Switzerland from 1 January 2015. The treaty will apply for both countries regarding Article 25 on exchange of information from 1 January 2015.The treaty replaced the 1980 tax treaty between the two countries.

Note : H , K , K1 , per today updates have to take place

“All information included in the present does not constitute legal or business advice and shall not be interpreted as such

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