Following the endorsement of the Government Follow-up on Expense Change and AHV Supporting (TRAF) in May 2019, which went into force starting around January 1, 2020, the cantons were expected to execute the new measures in their cantonal assessment regulations and guarantee similarity with the bureaucratic TRAF guidelines.
TRAF Overview
As of January 1, 2020, Switzerland will no longer offer the tax advantages of holding, domicile, and mixed companies, which are no longer recognized internationally. At the same time, transitional rules are supposed to ensure that ordinary taxation goes smoothly.
Tax reform in Nidwalden
Because of the Coronavirus pandemic, the arranged cantonal decision on May 17, 2020, was dropped. The cantonal tax reform bill was approved by voters in the canton of Nidwalden on September 27, 2020, with a majority of 59.4%.
The tax reform in Nidwalden was officially implemented on October 13, 2020, when it was published in the cantonal gazette. As a result of Sex in Nidwalden, the revised cantonal tax law needs to be considered for the closing in October 2020 in terms of tax accounting (IFRS and US GAAP).
Tax measures in Nidwalden
Nidwalden introduces various available TRAF measures to maintain its appeal as a business location. The most significant changes to the canton of Nidwalden’s tax law are as follows:
Reducing the corporate income tax rate at the cantonal level, which reduces the overall corporate income tax rate (including direct federal tax) on pre-tax income from 12.66 percent to 11.97 percent, is an essential component of the amended tax law.
Companies that will lose access to preferential cantonal tax regimes will be able to take advantage of specific transitional rules. The so-called “two-rate system” will be added to the step-up practice currently available in Escort Nidwalden. Profits from the realization of hidden reserves generated under a privileged tax regime will be subject to a reduced tax rate upon request until the end of 2024 (a phased increase from 1.0% to 1.8%).
The maximum relief of 90% is fully utilized in the introduction of the OECD-compliant patent box.
The maximum amount of tax relief provided by a canton is 70 percent.
Property Gains Tax
The real estate gains tax is different for each canton. It’s almost always worth the wait. However, the amount of time a property has been owned significantly impacts the tax of Sex Fotos that is paid is the same throughout Switzerland. Any scenario can be simulated by the Houzz Real Estate Gains Tax Calculator, allowing you to observe the resulting tax change. Depending on the outcome, you may save a significant tax by delaying selling your property.
Conclusion
On January 1, 2021, the federal and cantonal tax reform measures will take effect following Nidwalden’s approval of the tax reform.
The Swiss corporate tax landscape underwent an unprecedented transformation due to the tax reform. Most corporate taxpayers are affected by the most significant overhaul of the Swiss tax system in decades. Taxpayers are advised to evaluate the impact of the changes and the appropriate measures to seize opportunities and avoid competitive disadvantages as the tax reform went into effect on January 1, 2020.