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The new Audit Regulations
On January 1st, 2008 statutory changes with regard to the audit procedure will enter into force. Henceforth there will be two
different audit procedures (ordinary/limited), depending on the
economic significance of the enterprise. Among other things the
regular audit will include a review whether the audited company has an internal control system.
The new provisions leave room for companies to deviate from the
system described above if they comply with certain specific requirements:
A group of shareholders representing at least 10 % of the share
capital may request that an ordinary audit is carried out (opting
up). This provision serves the protection of minorities.
Companies which on average employ less than 10 fulltime employees may with the consent of all shareholders forgo an audit (opting out).Under the same conditions the audit may be limited
to certain specific aspects (opting down).
Finally, companies which are not under an obligation to carry out
an audit may voluntarily submit themselves to a limited or even
an ordinary audit (opting in). Pressure for an opting in might e.g.
be exercised by crediting banks.
Taxes Holding privilege in Switzerland
Switzerland offers very attractive, and even more important, since years stable tax conditions
for holding companies. There is no change of this entrepreneurial and sustainable policy in sight.
Once a company claims its core activity to be the holding and administering of strategic equity
stakes of other companies than it may profit from the Swiss Holding privilege. Federal tax for
such a company accounts for 8.50% p.a. only which again can be booked and therefore deducted in
the subsequent year from income. As a result, effective Federal tax falls below 8.00% p.a.!
In addition, a so-called deduction from shareholding income can be claimed, which partially or
fully neutralizes income from such holdings from federal taxes. Netincorporation AG establishes
all legal Swiss companies' forms, offers domicile and administers all business activities based
on a contractual relation.
Swiss banking secrecy formally accepted by the EU
The European Union (EU) introduced its EU Savings Tax Directive (ESD) on July 1st, 2005.
Switzerland
Switzerland's agreement with the EU in no way compromises client confidentiality or Swiss banking secrecy. However,
Switzerland will introduce a, withholding tax "termed EU-retention" for individual clients having an account with a
Swiss domiciled Bank, or domiciled in one of the above mentioned three countries. Such an individual client has the
option of voluntary disclosure in order to avoid the following retentions rates:
Retention schedule
Starting from Juli 1st, 2005: 15%
Starting from Juli 1st, 2008: 20%
and finally from Juli 1st, 2011: 35%
Who is affected by this system of the automatic information exchange or EU-retention?
If you are an individual with a custody account in Switzerland or one of the other "Third Countries" (Liechtenstein, Monaco, Andorra and
San Marino) and you are domiciled (the country of domicile not the nationality!) in an EU country:
Current EU countries:
Austria*, Belgium*, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland,
Italy, Latvia, Luxemburg*, Malta, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, The Netherlands and United
Kingdom and also a number of dependent and associated territories of the EU, i.e. Jersey, Guernsey, Isle of Man,
Anguilla, Montserrat, British Virgin Islands, Turks and Calicos Islands, Cayman Islands, Netherlands Antilles and Aruba
then you are most likely affected, since at least some of your investments will probably generate interest income.
Exceptions:
From the beginning, the issue has only involved cross-border interest payments to individuals who are residents in one
of the above mentioned countries. In other words, investment income - such as dividends - is not covered and neither are
legal entities, public organizations or institutional investors!
* Voluntary disclosure or EU-retention
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