Banks / New rules for tax allocation

Banks have to allocate taxable profit and taxable capital to the locations in which they carry on business. The corresponding tax allocation rules were established by the Swiss Tax Conference in 1995.

As the banking sector has undergone profound changes over the last 25 years, the applicable tax allocation rules were revised by the Swiss Tax Conference within the new Circular Letter No. 5 and was published in November 2018. The new rules are binding for the tax allocation for the 2019 financial year.

As the Annual General Meetings of the banks are usually held between April and June, the 2019 tax return season will now start with the application of the new rules for the tax allocation!

New rules:

The international tax allocation continues to be based on the relevant accounts of the permanent establishments.

The intercantonal profit and capital allocation is now consistently based on the gross salary subject to the old age insurance. In the past, different methods were applied and accepted by the tax authorities.

The so-called profit pre-share to the head office no longer exists. The allocation of participations to the headquarters remains unchanged. Regarding real estate, a distinction is required between three categories. Different allocation rules apply to each category.

The intercommunal tax allocation is basically a matter of the respective canton. However, the new circular letter recommends that the principles set out in the circular should also be applied to intercommunal tax allocations.


In contrast to the past, when preparing the 2019 tax return, the (Excel) templates of the previous year can no longer be used. The templates for intercantonal and intercommunal tax allocation needs to be reviewed and the new rules need to be implemented. In particular, the profit pre-share must be removed and the capital tax allocation has to be based on the gross salary subject to the old age insurance.

If any questions arise during the preparation of the 2019 tax return, please feel free to contact us.

May 2020 | Authors: Roland Reding, Christina Moser

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