The issuance stamp duty on capital
The issuance stamp duty is a federal tax on the creation and increase of equity capital in Swiss corporations. Anyone setting up an AG or a GmbH, or carrying out a capital increase, needs to know whether and when this duty applies, because it has a direct impact on the cost of the transaction. The good news is that a statutory exemption threshold spares the majority of small and medium-sized enterprises.
What it taxes
The issuance stamp duty falls on the issuance and the increase of the nominal value of participation rights in Swiss companies: shares of an AG, quotas of a GmbH, participation certificates. It therefore taxes the contribution of equity capital, not the company’s business activity or its income.
In principle, the following fall within its scope:
- the formation of a company with an issuance of capital;
- ordinary capital increases;
- additional contributions and non-repayable payments by shareholders that increase equity capital without consideration.
The threshold that protects SMEs
The decisive factor is the exemption threshold provided for by the Stamp Duty Act. Up to a certain amount of equity capital issued, the duty is not owed. This means that many formations of AGs and GmbHs, with modest capital, generate no issuance stamp duty burden at all.
The duty becomes relevant only when the capital issued exceeds the threshold: in that case the rate applies to the excess portion. For most start-up companies, therefore, the issue does not arise; it becomes concrete in the case of significant capitalisation transactions, typical of financing rounds or asset restructurings.
How it is calculated
When the duty is owed, a rate is applied to the amount of equity capital exceeding the threshold. The taxable base is generally the amount actually contributed — which may be the nominal value or the total amount received, premium included, depending on the nature of the contribution. In the case of contributions in kind, the value of the assets transferred is taken into account.
It is wise to estimate the duty before resolving on the transaction, so that the cost enters into the financial plan of the capital increase and does not come as a surprise after the fact.
Exceptions and special cases
The law provides for various instances of exemption or relief, designed so as not to hinder economically neutral or worthwhile transactions. These generally include certain restructuring operations — mergers, demergers, conversions — and certain measures for the reorganisation of companies in difficulty, where levying the duty would aggravate the situation. The conditions are technical and must be verified case by case: exemption cannot be presumed without examining the concrete structure of the transaction.
Do not confuse it
The issuance stamp duty is often confused with other levies. It is worth distinguishing:
- Withholding tax (35%): this falls on dividend distributions to shareholders, not on the contribution of capital. It is the opposite: the stamp duty concerns the money coming into the company, the withholding tax the money going out.
- Transfer stamp duty: this concerns the purchase and sale of securities, not their issuance.
- Cantonal capital tax: this falls annually on the existing equity capital, not on the act of issuance.
These are different taxes, with distinct bases and moments of taxation, that must be considered together when planning a company’s capital structure.
Planning capital contributions
Since the duty is triggered only above the threshold, the structure of contributions matters. In some situations it is possible to organise the capitalisation — for example by combining equity capital and different forms of financing — in an economically coherent and tax-efficient way, always within the rules. The aim is not to evade the levy, but to avoid paying it through carelessness on transactions that could have been set up better.
How we work
At SIH ONE we assess the impact of the issuance stamp duty already at the design stage of formations and capital increases: we check the threshold, estimate any burden and verify whether the transaction falls within one of the exemptions provided for, coordinating everything with withholding tax and capital tax. The corporate documentation is prepared and validated by a qualified professional.
Are you planning a formation or a capital increase? Let’s assess the tax costs together.