- Individuals
Taxation of board of directors and foundation board fees
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Alain Selon, a French national and former actor, lives in Paris following the end of his career. He is involved in charitable work and has served since 2024 on the board of the subjectively tax-exempt “happy children foundation,” based in Zurich, which is dedicated to supporting and promoting disadvantaged children in Europe. For the meetings, which usually take place in Zurich, he flies to Switzerland for a few days. The board of trustees’ remuneration for 2024 amounts to a fixed annual compensation of CHF 50,000. In addition, Selon receives a lump-sum expense allowance of CHF 12,000 in accordance with the expense regulations approved by the Canton of Zurich.
As in the basic facts. The foundation compensates the board members with a flat-rate meeting fee of CHF 10,000, which is paid for each meeting attended. In 2024, the board meetings took place once each in Zurich, London, and Vienna. Alain attended all three meetings in person and thus received CHF 30,000. In addition, lump-sum expense allowances totaling CHF 6,000 are paid (there are no approved expense regulations).
Alain Selon resides in Gstaad and is subject to the expenditure-based taxation system for direct federal tax and the cantonal and municipal taxes of the Canton of Bern. The foundation board fee for 2024 amounts to CHF 50,000 and complies with the foundation’s compensation regulations.
As in the basic facts. The foundation does not compensate its board members. However, expenses incurred in connection with board activities are reimbursed.
Mostindien-Gruppe AG is headquartered in Frauenfeld (TG). The group manufactures components for electric cars. It has subsidiaries in Germany, France, and Poland. Dr. Rainer Motzki, a German citizen and partner at a renowned corporate law firm in Frankfurt, is a member of the board of directors of Mostindien-Gruppe AG. He resides in the Frankfurt metropolitan area. In 2024, he receives a board of directors’ fee of CHF 120,000. Some board meetings take place remotely; others are held in Frauenfeld.
From his law practice, Dr. Rainer Motzki will earn income equivalent to CHF 800,000 in 2024.
In 2025, Dr. Rainer Motzki falls out with his fellow board members. To make his resignation as swift as possible, he is offered a contractual severance payment of CHF 150,000, which Motzki accepts. He resigns from the board.
Mostindien Group AG slides into a serious crisis starting in 2023. Since Motzki is also an ambitious entrepreneur, in addition to his board mandate, he assumes the role of CEO as a delegate of the Board of Directors effective January 1, 2024, a position limited until December 31, 2024. He suspends his legal practice during this period. The management role is remunerated with CHF 650,000, which is paid to him in addition to his Board of Directors’ fee of CHF 120,000. Motzki typically returns to Frankfurt every other weekend.
Daniel Düsentrieb, a German national, became the full-time Chairman of the Board of Directors of Mostindien-Gruppe AG on February 1, 2021. Previously, he was the Managing Director of the German subsidiary. He also moved his residence to Frauenfeld as of February 1, 2021. His compensation also included employee stock options. Mostindien-Gruppe AG faces an existential crisis starting in 2023. In the spring of 2024, Daniel Düsentrieb is forced to resign due to external pressure. On May 1, 2024, he leaves Switzerland and returns to Germany. His employment contract was terminated effective April 30, 2024.
He was granted (unrestricted) employee shares in Mostindien-Gruppe AG at a recognized formula value as early as May 1, 2020, while he was still serving as managing director of the German subsidiary. Daniel Düsentrieb sells the employee shares on February 1, 2025.
In 2020, Daniel Düsentrieb was granted restricted employee stock options subject to a vesting period ending on December 31, 2025. As part of the termination agreement, Mostindien-Gruppe AG agreed that Daniel Düsentrieb may retain the options regardless of the ongoing vesting period. He will exercise them after the vesting period expires.
Mostindien-Gruppe AG is 20% owned by a listed Swiss group. In 2021, Bob Robson is appointed as Chairman of the Board of Directors, “nominated” by this investor. He is also granted (unrestricted) employee shares free of charge, which he must, however, transfer to his employer company in Switzerland due to a contractual obligation to surrender them. For civil law reasons, the employee shares can only be issued to Bob Robson and not directly to the parent company.
Dr. Rainer Motzki retired from the commercial law firm in Frankfurt upon reaching retirement age. He is now spending his retirement in Ermatingen on Lake Constance (TG) in a spacious condominium with a lake view. Due to his previous employment, he still serves on the supervisory boards of German corporations for some of his former clients. He declares the compensation received for this work in his Swiss tax return as income from employment. The assessments for the years 2023 and 2024, based on these self-declarations, are final. The German tax authorities also taxed the corresponding income in 2026, likewise based on Art. 16 of the CH-D DTA. Correctly, Switzerland should have exempted the income subject to the progression clause pursuant to Art. 24(2)(1) of the CH-D DTA.
Stefania Encasa is an Italian citizen residing in France. She is registered as a civil engineer in France and is a partner in a Paris-based engineering firm organized as a general partnership. In addition, she serves on the board of directors of the world-renowned architectural firm Graf & de Neuve Ltd., a public limited company headquartered in Basel.
As a member of the board of directors of Graf & de Neuve Ltd., Stefania helps decide, among other things, on the acceptance of projects and participation in tenders or competitions; once a year, she also represents Graf & de Neuve Ltd. at an international conference, held alternately in Europe or North and South America. She attends six board meetings per year; twice a year she travels to Basel for one day each time, and she participates in the other meetings online from her Paris office. She also handles meeting preparation (consisting primarily of reviewing management proposals, studying project descriptions, making phone calls, and sending emails) from Paris. The greatest time commitment associated with her board duties is devoted to preparing for and attending board meetings.
In addition to her commitments in Paris and Basel, Stefania Encasa is employed as an expert at the Belle Case Fondazione in Milan. The foundation is dedicated to the preservation of beautiful historic buildings in Italy. Stefania Encasa makes her expertise available to the foundation on a 20% basis and travels to Milan every 14 days for two days for this purpose.
Stefania Encasa is not an Italian citizen but a French citizen. She performs her board duties for Graf & de Neuve Ltd. from France for less than 25% of the time. In addition to her involvement with the Belle Case Fondazione, she is also a member of the board of trustees of a family foundation based in Liechtenstein, whose beneficiaries include a longtime friend. Stefania Encasa travels to Vaduz for all board meetings.
Selina Arnet, a resident of Bern, is elected to the board of directors of MX AG in Zurich. In connection with the election, she insists that MX AG pay her board of directors’ fee of CHF 75,000 per year to a company she personally owns, S.A. Consulting GmbH, Bern. To this end, a mandate agreement is to be concluded between S.A. Consulting GmbH and MX AG, and S.A. Consulting GmbH is to issue MX AG a quarterly invoice including VAT.
In addition to her work for MX AG, she is also a member of the Board of Directors of AllRound AG (board fee: CHF 85,000 per year) and EtCetera AG (board fee: CHF 55,000 per year). These two companies have also entered into a mandate agreement with S.A. Consulting GmbH and pay their board fees to this company.
Selina Arnet is employed by S.A. Consulting GmbH on a 90% basis and receives an annual salary of CHF 150,000 from the company. She has the company’s annual profit after taxes distributed to her as a dividend.
Same as the basic variant. However, Selina Arnet receives only an annual salary of CHF 35,000 from S.A. Consulting GmbH. Her BVG coverage is based on an annual salary of CHF 150,000. She receives the annual profit as a dividend, which she uses entirely for contributions to her occupational pension plan.
