In its decision of 23 November 2021 (A-5038/2020), the Federal Administrative Court (FAC) assessed the activity of a company that professionally accompanies company owners interested in selling their shares through the entire sales process and handles the sales transaction.
The FAC concluded that the company falls under the definition of an “investment advisor” under the Stamp Duty Act, subsequently qualifies as a securities dealer and acts as an intermediary in the sale of shares for the purposes of Swiss stamp duty. Thus, the company is obliged pay Swiss stamp duty to the Swiss Federal Tax Administration.
Swiss natural persons and legal entities, as well as partnerships, Swiss domestic institutions and Swiss branches of foreign companies whose activity consists exclusively or to a substantial extent in acting as investment advisors or asset managers in the purchase and sale of taxable securities are deemed to be securities dealers.
A distinction must be made between (1) the "normal" advisor and (2) the investment advisor.
An investment advisor qualifies as a securities dealer for the purposes of Swiss stamp duty if the investment advisor causally participates in the conclusion of a security transaction and knowingly causes or contributes to the actual success of the exchange of the concurrent declaration of intent.
The activity of the (investment) advisor does not lead to qualification as a Swiss securities dealer if the advisor limits himself to activities that merely point out the possibilities of purchases and sales in a non-binding manner, without the advisor being directly involved in the corresponding transactions.
Significance of the ruling for practice
In practice, the distinction between (1) "normal" advisors and (2) investment advisors for the purposes of Swiss stamp duty is becoming more challenging for companies such as M&A advisors. If the professional M&A advisor qualifies as an investment advisor for the purposes of Swiss stamp duty, the advisor must register with the Swiss Federal Tax Administration as a securities dealer, keep a stamp duty register and pay Swiss stamp duty on taxable transactions.
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