The Federal Tax Administration has published information on legislative changes and ordinances for the next 3 years, including the proposal for taxation of discretionary trusts.

The table available in German, French and Italian provides an overview of the changes, their entry into force, the contents in brief and the respective links to the official decree and the press release.

Our comment
The introduction of the trust as a new part of the code of obligations, the consultation note provides for adjustments to the tax system: Irrevocable discretionary trusts without fixed participation of the beneficiaries will be taxed like foundations. The trust industry agrees that the proposal to tax irrevocable and discretionary trusts like foundations is not only flawed, but likely also unconstitutional. In particular, the following two positions are possible:

A position is that the tax part of the draft be completely removed from the draft and that the existing tax rules, i.e. Circular 30 of the Swiss Tax Conference, Circular 20 of the AFC and cantonal practices remain unchanged in the new Swiss trust. Details here.

the other position is that it seems unlikely that the parliamentary body will accept a new law on material trusts without codifying the tax aspects. The fiduciary industry should therefore propose an alternative codification at the level of tax law. Such an alternative proposal would be based on the rules of STC Circular 30, but possibly with certain modifications in order to respond to the criticisms expressed in the report: for example, the treatment of trusts established abroad must be aligned with that of Swiss trusts – established trusts.


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