PAOLO MOREL, MANAGING PARTNER AT PM CONSULENZE SA

19 April 2018

About

Financial executive with experience in all aspects of accounting, auditing and financial management. Direct experience with real estate, financial consulting and venture capital / Private Equity.


Specialties: International fiscal consulting & M&A

Despite of the rejection of the last referendum in Switzerland on the Corporate Tax Reform Act III, do you expect that some of the matters proposed would be presented again, especially those one referred to the Patent Box?

It is too early to make concrete projection about the matters that will be proposed in the new Fiscal Scheme, which is already in process of analysis by the Federal Council. In my opinion, some actions are necessary and should not be postponed.  The Patent Box is one of these in order for Switzerland to compare with the other jurisdiction in which it is already active.  The Patent Box will allow Switzerland to attract know-how and would grant a tax reduction of the current companies, well-known names or less, that have patents of key value among their assets. In case the Patent Box would return as topic of the Tax Scheme, will be essential the best effort in order to have the proposal detailed clearly to the electorates. 

 

After the negative vote on the last referendum in Switzerland on the Corporate Tax Reform Act III, do you expect that Italy would revise its position vis a vis Switzerland, mainly on economical/ fiscal issues? These results could affect in a negative way on Swiss companies, which are related for business with Italy?

The results of the referendum had an immediate effect on the media, including the Italian newspapers that have reported in first instance a quite strict reaction. But in my opinion, going through the issue, this reaction would not largely affect the countries relations, which are already established on substantial cooperation basis. Switzerland is not included anymore on two of the three Italian “black lists”, so it remains for the individuals only. Moreover on an Italian CFC (Controlled Foreign Companies) perspective, with reference to the last clarifications given in terms of simplification of the law, Switzerland and specifically Canton Ticino, allows the conditions to have the provision not applied, due to the effective tax burden on the company taxed on ordinary basis. Lastly, Switzerland is complying with requirements of transparency and information exchange. For these reasons I think that the countries will not “backtrack” on the way taken.

 

Switzerland and its innovative “start-up” attract significant amount of venture capital, in spite of the foreign investors cannot access, specifically, on tax incentives or benefits.  Anyway, is existing an opportunity for an entrepreneur and/or a venture capitalist to invest in Switzerland?  

I make reference to the most recent Report of the Federal Council that treats about “Start-up companies with high growth ratios in Switzerland”. As mentioned therein for these companies presence, Switzerland holds one of the first places in European ranking.  In terms of venture capital, comparing the venture capital investments share with the GDP, Switzerland holds the second place in Europe. The venture capital market is open and is mostly supported by foreign funds. There are no specific incentives for investors but if we compare the tax regimes of the other countries in terms of capital gain exemption, the swiss one is still interesting.  Until the capital gain from the sale of private assets will remain fully exempt, it seems not necessary to act for any different specific tax exemption. But it is important to divide two different categories, the investor relocated in Switzerland and the foreign investor. On the first case the investor, which has moved to Switzerland and invested risk capital, in case of sale of its shares would benefit on a full exemption on capital gain. On the second case, the investor that keep its foreign residence is not admitted to this benefit. 

 

In 2015 the EU-VAT regulation on e-commerce is changed. How the swiss companies – as “not-UE entities” – fulfil their obligations? 

The cross-border VAT regulation is always a complex issue and should be treated on a case by case situation, so it is not possible to the define a simple and always applicable solution.  The recent changes on the EU-VAT rules on e-commerce could imply an EU-VAT identification for the swiss entity.  The regime is different depending whether (i) the company works on a direct or not-direct e-commerce activity, (ii) the recipient of the goods (B2B vs B2C) and lastly (iii) what is the “material trail” of the goods. Briefly, if the traded goods are firstly imported in Switzerland (with a substantial entry of the goods in the territory and consequential payment of Swiss VAT @8%) the further sale will be fully VAT exempt (it means no VAT due). Instead, if the goods trail goes from an EU member country to another, an EU-VAT identification with the appointment of a tax representative is likely requested. We are able to recommend to our clients tax experts that could act as VAT representative in an EU country, with the requested skills and reasonable costs.

 

 

 

 

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