Art. 61a DBG and Art. 24c StHG codify the tax-neutral recognition of hidden reserves (including goodwill) upon the commencement of tax liability in Switzerland (the so-called “immigration step-up”). This provision allows, upon the transfer of a place of business or of functions, assets, or operations from abroad to Switzerland, the difference between the previous foreign book values and the fair market value at the time of relocation or the transfer of the assets to Switzerland to be recognized for income tax purposes and made available through subsequent depreciation, without realizing taxable income at the time of entry.
This article first outlines the structure and scope of application of Art. 61a DBG and Art. 24c StHG. A key focus is on the interaction with foreign exit taxes (“Exit Taxes”). Numerous countries, particularly EU member states acting in accordance with the so-called “Anti-Tax Avoidance” Directive (ATAD), tax unrealized capital gains at the time of departure. Without coordinating measures, there is a risk of economic double taxation if Switzerland taxes the same capital gains again. The immigration step-up allows for a corresponding recognition here by reflecting the hidden reserves taxed in the country of departure as increased tax values in Switzerland, which can then be utilized for tax relief through depreciation without requiring a revaluation in the commercial balance sheet. It should be noted, however, that the application of the immigration step-up is not contingent upon the taxation in the country of origin of the profit tax values that are recognized in Switzerland on a tax-neutral basis.
