Everything SMEs need to know about filling in their tax return in times of corona

People are staying at home, shops are closed and sales are down. The measures taken to combat the coronavirus have had drastic consequences for entrepreneurs, which are reflected in the anual tax return. Are you the owner of an SME or an entrepreneur? Inform yourself now about the corona tax return.

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Corona tax return

Systemically relevant, corona trench and pandemic are the Swiss words of the year. A clear sign of the strong impact the coronavirus and the measures to combat it have had on our everyday lives and the economy. After a turbulent year, many entrepreneurs are now wondering how this particular situation will affect their tax returns

Are SMEs allowed to form special corona provisions?

While the creation of corona provisions in the 2019 annual financial statements is accepted by certain cantons (e.g. Zug, Valais), other cantons (e.g. Schwyz, Appenzell Ausserrhoden) firmly reject this possibility. Both the FTA regarding direct federal taxes and the Swiss Tax Conference SSK are opposed to such provisions and recommend that the cantons do not accept them either. Companies considering special corona provisions are advised to obtain information from the cantonal tax authorities on their permissibility.

How does the home office obligation affect SMEs?

One of the main issues regarding the corona tax return is the question of whether, how and by whom home office expenses may be deducted. Said questions is answered differently by the cantons. While a number of them have decided to allow for the usual professional expenses (as they would have been possible without corona) to be deducted, others accept special "corona deductions" such as a private study.

Learn about the deductibility of home office costs in your canton.

Regardless which deductions are possible, it is always the employee who is responsible for claiming the expenses.

For the employer, however, the home office is relevant insofar as the question arises as to whether the employees in the home office can establish a tax-relevant permanent establishment of the company or even a place of administration (i.e. a tax liability in another canton).

Both options are theoretically possible, depending on the size of the SME in question and the duration of the home office. However, we can reassure entrepreneurs: provided that the home office phases forced by the corona crisis are of limited duration, the establishment of a permanent establishment or a competing tax liability should remain unlikely. In any case, the employer lacks the necessary power of disposal over the employee's home office premises.

Can home office employees abroad cause a foreign tax liability?

Due to the border closures, many foreign employees of Swiss companies, especially from Germany, Italy and France, are forced to work from abroad. Because cross-border commuters are unable to visit Swiss offices, the question arises as to whether international assignments trigger a change in the taxation situation or social security treatment of employees. Fortunately, for the time being, this question can be answered with "no".

On May 14, 2020, France and Switzerland reached a mutual agreement stating that the existing tax treaties will remain valid during the period of application of the COVID-19 derogations. Accordingly, the taxation of cross-border commuters between France and Switzerland will remain unchanged despite corona and home office.

In addition, the OECD has stated in a publication that temporary home office activities by employees should not in principle lead to any changes in taxation and, in particular, should establish any foreign permanent establishments. However, the organisation also draws attention to the unilateral laws of other countries, which may provide for different regulations under certain circumstances (e.g. lower requirements for the establishment of a foreign permanent establishment or place of administration).

Did you know? The FTA has created a FAQ on the subject of corona and tax returns.

Do you have questions about the Corona tax return? The taxea specialists are happy to assist you with their comprehensive expertise.

Source : https://www.weka.ch/themen/steuern/juristische-personen/steuerliche-sonderstati/article/steuern-und-coronavirus-steuern-in-zeiten-der-covid-19-krise-1/