Tax Privileges for Startups on wealth taxes in connection with increase in capital


What's it all about?

In recent years, founders of startups have repeatedly been confronted with the problem that the tax authorities have used the value paid in financing rounds for wealth tax assessments. Depending on the premium paid by the venture capitalists, the tax burden for the founders rose disproportionately.

What applies?

As a result of a change in practice in the Canton of Zurich, the situation for the founders has improved considerably in the meantime. In the case of startups, for example, only the value of equity (net asset value) is subject to wealth tax. Any premium paid in excess of this amount will not be taken into account. In practice, a company is considered a startup as long as it does not achieve representative annual profits on a sustainable basis.

In this context, a motion on the competitive tax treatment of startups, including their employee shareholdings, was accepted by both the National Council and the Council of States. It is now up to the Federal Council to draw up a draft for the implementation of the motion.

If you are involved in a startup or are planning to set up one and would like to find out more about the legal consequences, do not hesitate to contact us. The MME M&A team will be happy to support you in your plans and protect your interests – comprehensively, proactively and pragmatically.

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June 2019 | Authors: Samuel Bussmann, Alex Enzler

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