New Swiss Tax Act on Employee Equity Awards - BAKER & McKENZIE

New Swiss Tax Act on Employee Equity Awards

Please contact Baker an alert from our Zurich office on a new Federal Act adopted by the Swiss Parliament on December 17, 2010, dealing with the tax treatment of employee equity grants in Switzerland. The Act is not in force yet and the precise effective date will be determined by the Swiss Federal Council.

The Act provides that most employee stock options will be taxed only at exercise. Restricted stock will be taxed at the time of "acquisition" (i.e., grant), but the taxable amount at grant may be reduced to reflect the restrictions. The Act does not expressly address RSUs, and it is not certain if those will be treated as options (with a nil exercise price and a fixed "exercise date") or other "employee participations."

The Act also provides for the tax treatment of stock options held by employees who transfer into and out of Switzerland. Please see the alert from our Zurich office for more information.

We will keep you apprised of any clarifications that are forthcoming. In the meantime, if you have any questions, please contact your GES attorney.

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