Corporate Tax

Company Tax 2021 – Tax

To print this article, all you need is to be registered or login on


Types of corporate tax work


In comparison to 2019, which reported a transaction value
amounting to USD 127bn, 2020 was quite an unusual year due to the
global pandemic accompanied by the uncertainty of the economic
impact caused by COVID-19. As such, the uncertainty and the waves
of the pandemic emerging globally resulted in a significant drop of
total deal value by around 50% to approx. USD 56bn. Almost
three-quarters of that amount was attributable to the 10 largest
mergers and acquisitions (M&A). These were driven primarily by
the two largest transactions in terms of deal value, the public
takeover of Sunrise Communications AG, the second-largest
telecommunications provider in Switzerland after Swisscom, and the
acquisition of CPA Global Limited, a leader in the development of
intellectual property and legal support services. Notably, Swiss
companies acquired significantly more foreign companies than
vice versa: outbound transactions amounted to 42% (154
transactions), whereas there were only 23% inbound transactions (84
transactions). The impacts of COVID-19 were low, or at least lower
than expected in the M&A market. The associated physical
absence broke or accelerated new grounds such as a shift from
physical signings and closings. The recent developments required
adjustments and facilitated the dealmaking process.

Tax litigation

In addition to traditional tax litigation matters, international
requests for exchange of information remain a highly prolific
ground for tax litigations in Switzerland. Switzerland continues to
receive a large number of requests for assistance under the double
tax treaties (DTTs) and agreements on the exchange of information,
and the Multilateral Convention on Mutual Administrative
Assistance. 2020 was Switzerland’s record year with 46 requests
to foreign tax authorities.1 Most of the 2,112 requests from
foreign authorities received by Switzerland were from Israel,
France, South Korea, Germany and Austria.

Most court cases usually deal with procedural aspects of the
administrative assistance requests, such as the possibility to use
information in respect of third persons, provision of information
in respect of third persons (which is a common concern when, for
example, the data in respect of bank account transactions is
provided), and the obligation of the Swiss Federal Tax
Administration (SFTA) to inform third persons ex officio
and provide them with a possibility to object to the disclosure of
information by way of administrative assistance. The fact that the
decisions of the Swiss Federal Supreme Court often reverse the
decisions of the Swiss Federal Administrative Court shows that
there are still many aspects of the administrative assistance
practice that remain uncertain. In 2020, the Federal Supreme Court
made several leading decisions in administrative assistance cases,
of which two are particularly noteworthy. In July 2020, the Federal
Supreme Court ruled in a case that third parties whose
identification characteristics are (exceptionally) not redacted do
not need not be informed about the contemplated data transfer.2 A
reservation applies to so-called “evidently entitled
appellants”. However, the vague wording indicates that there
is room for interpretation. As a result, data transfer of third
parties might be processed without the third party having a
possibility to appeal against it. According to another decision
dated the same day,3 the recipient state shall not be allowed to
use information obtained through administrative assistance
procedures against third parties. This restriction is referred to
as the principle of personal specialty. In the context of the
previous practice, the latter decision deserves special mention
since the Federal Supreme Court overruled the Organisation for
Economic Co-operation and Development’s (OECD’s) view on
the use of obtained information through administrative assistance.
Although this seems to provide better protection of affected
parties, potential violations of the principle of speciality by the
recipient state following the OECD’s view and corresponding
prosecutions, however, cannot be prevented. Therefore, there is a
reasonable expectation that the trend of increasing disputes in the
context of administrative assistance proceedings will continue.

Financing transactions and liquidity enhancement

With the Swiss economy feeling the impact of the COVID-19
pandemic, 2020 highlighted an increase in financing and
re-financing transactions, as well as other measures aimed at
liquidity management of the balance sheet situation. The
accompanied types of work range from the issuance of straight bonds
and conclusion of credit facility agreements to equity issuances
and issuance of convertible bonds, or a combination of all of the
above. In addition, new forms of debt financing emerged. For
example, in September 2020, Novartis issued a EUR 1.85bn
sustainability-linked bond, which is the first of its kind in the
healthcare industry and the first sustainability-linked bond
incorporating social targets.

For liquidity reasons or because of the requirements for
emergency loans from the federal government, companies may have to
waive the distribution of already declared dividends or change the
purpose of the share buybacks; for example, by placing the treasury
shares on the market or distributing them as dividend in-kind. All
such measures require a careful tax analysis to avoid adverse tax


During 2020, only two companies (Ina Invest Holding AG and V-Zug
AG) were listed on the Swiss stock exchange. These were not classic
IPOs but spin-offs. The small number of IPOs was a consequence of
the uncertainty caused not only by the COVID-19 pandemic, but also
the US presidential elections. There is expectation or at least
hope that the vaccinations and cures will bring the current
environment one step closer to (a little or more) economic

On 29 April 2021, Switzerland’s first IPO was launched:
PolyPeptide Group AG, a company from the life sciences sector and a
global leader in peptide development and manufacturing, listed its
shares on the Swiss stock exchange with a market capitalisation of
CHF 2.4bn. The second IPO is Montana Aerospace AG, a leading
manufacturer and supplier of system components and complex
assemblies for the aerospace, e-mobility and energy sectors with
worldwide engineering and manufacturing operations. Its shares were
listed on the Swiss stock exchange with a market capitalisation of
CHF 1.4bn.

Significant deals and themes


The following deals stood out in 2020 and early 2021, all
requiring tailored corporate tax advice for the transaction itself,
the integration or the debt financing:

  • Farmers Group, Inc. and Farmers Exchanges agree to
    acquire MetLife’s property and casualty business
    : In
    December 2020, Zurich Insurance Group’s wholly owned
    subsidiary, Farmers Group, Inc., together with Farmers Exchanges,
    agreed to acquire MetLife’s property and casualty business in
    the US for USD 3.94bn. The transaction was completed in April
  • Partners Group acquires significant equity stake in
    Telepass S.p.A.
    : In December 2020, Partners Group, the
    Swiss-based global private markets investment manager, acquired a
    significant equity stake in Telepass S.p.A., a leading electronic
    toll collection services provider in Europe. The transaction values
    Telepass S.p.A. at an enterprise value of over EUR 2bn.
  • H2 Energy Holding AG and Trafigura Holding GmbH enter
    into an investment agreement
    : On 17 December 2020, H2
    Energy Holding, a Swiss pioneer in the fields of renewable energies
    and hydrogen technology, entered into an investment agreement with
    Trafigura Holding regarding a minority investment in H2 Energy
    Holding. In addition, H2 Energy Holding and Trafigura Holding
    agreed to form a joint venture to develop the design and
    implementation of fuel cell and green hydrogen-based ecosystems for
    hydrogen-fuelled trucks on a Europe-wide scale.
  • Liberty Global completes the acquisition of Sunrise
    Communications AG
    : After its pre-announcement for its
    public tender offer to acquire all publicly held shares of Sunrise
    Communications and following receipt of the regulatory approvals,
    Liberty Global successfully completed the acquisition of Sunrise
    Communications in November 2020. Total transaction value amounted
    to approx. USD 7.15bn and was the largest transaction in
    Switzerland in 2020.
  • Warburg Pincus LLC sells Avaloq to NEC
    : In October 2020, Warburg Pincus, a leading
    global private equity firm, and other shareholders, sold their
    shares in Avalog, a Swiss-headquartered, internationally leading
    fintech company, to NEC Corporation. The transaction value amounted
    to USD 2.2bn.
  • Vifor Pharma Group sells OM Pharma: In
    September 2020, Vifor Pharma, a global leader in iron deficiency,
    nephrology and cardio-renal therapies, sold its OM Pharma business,
    which primarily focuses on therapies for respiratory and urinary
    tract infections and is active in the treatment of vascular
    diseases, to Optimus Holding Ltd., a company founded by Etienne
    Jornod together with long-standing Swiss entrepreneurs and the
    Turkish pharmaceutical company Abdi Ibrahim.
  • Lupa Systems LLC becomes new anchor shareholder in MCH
    Group AG
    : On 10 July 2020, MCH Group announced a
    comprehensive set of measures, including a new anchor investor,
    Lupa Systems, an independent private investment company owned by
    James Murdoch. In order to strengthen its capital structure and
    shareholder base and to accelerate its ongoing transformation, MCH
    Group’s board of directors proposed to its shareholders a
    capital increase of CHF 104.5m, Lupa Systems as a new anchor
    shareholder, and a restructuring of the group’s debt capital.
    Lupa Systems and the public sector shareholders, who were expected
    to each hold around one-third of MCH Group’s shares, have
    signed a long-term relationship agreement to, among other things,
    secure Art Basel in Basel. The comprehensive set of measures
    proposed by MCH Group were dependent on the approval of the MCH
    Group’s shareholders, which finally took place on 27 November
  • BP Plc sells its chemicals business to INEOS Group
    Holdings SA
    : In June 2020, BP sold its petrochemicals
    business for USD 5bn to Sir Jim Ratcliffe’s INEOS Group. The
    deal resulted in INEOS taking on BP’s aromatics division, which
    produces chemicals for polyester used in clothing, film and
    packaging, as well as BP’s acetyls business, whose products are
    used in food flavourings, paints and glues.
  • Firmenich acquires DRT from Ardian: On 28 May
    2020, Firmenich announced that it had successfully completed its
    acquisition of Les Dérivés Résiniques et
    Terpéniques (DRT), a world leader in plant-based chemistry,
    mainly from pine trees, and one of the leading suppliers globally
    of high-quality, renewable ingredients. The transaction value
    amounted to USD 1.917bn.
  • Canada Pension Plan Investment Board sells Veeam
    Software AG
    : In March 2020, Canada Pension Plan Investment
    Board sold Veeam Software, a global leader in cloud data management
    software, to Insight Partners for a transaction value of USD 5bn.
    This was one of the largest transactions in Switzerland in the
    first half of 2020.
  • Parjointco N.V. and Pargesa Holding SA announce
    reorganisation of holding structure
    : On 11 March 2020,
    Parjointco, a company jointly controlled by Power Corporation of
    Canada and the Frère family, and Pargesa Holding announced
    an agreement for a proposed transaction that would simplify the
    group structure pursuant to which Pargesa shareholders receive
    shares of Groupe Bruxelles Lambert.
  • Equistone Partners Europe acquires Franke Water Systems
    : On 3 March 2021, Equistone acquired Franke Water
    Systems (KWC and WSC Groups), an international manufacturer of
    intelligent water solutions for residential bathrooms, residential
    kitchens and commercial washrooms, from Franke Group. The
    transaction closed on 30 April 2021.


  • Novartis issues a EUR 1.85bn sustainability-linked
    : In September 2020, Novartis Finance S.A., a
    subsidiary of Novartis AG, issued a EUR 1.85bn
    sustainability-linked bond due 2028 with an interest rate of
    0.000%. The bond is the first of its kind in the healthcare
    industry and the first sustainability-linked bond incorporating
    social targets
    , with bondholders entitled to receive a
    higher amount of interest if Novartis fails to meet its targets for
    expanding access to its innovative medicines. The bond is
    guaranteed by Novartis AG.
  • Chubb INA Holdings Inc. issues USD 1bn Senior
    : On 15 September 2020, Chubb issued USD 1bn Senior
    Notes due 2030 with an interest rate of 1.375%. The Senior Notes
    are unconditionally guaranteed by Chubb Limited, Zürich,
    Switzerland, and are registered on NYSE.
  • Swiss International Air Lines AG and Edelweiss Air AG
    enter into a CHF 1.5bn credit facility agreement secured by the
    Swiss Confederation combined with location policy
    : Swiss International Air Lines and Edelweiss Air
    have entered into a CHF 1.5bn revolving credit facility agreement
    with Credit Suisse (Schweiz) AG and UBS Switzerland AG as mandated
    lead arrangers, coordinators and lenders and additional banks as
    part of a syndicate. The Swiss Confederation, represented by the
    Swiss Federal Department of Environment, Transport, Energy and
    Communications, acted as surety provider covering 85% of the
    credit. The financing is linked to certain Swiss location policy
    measures. Deutsche Lufthansa AG and the German government have
    agreed to this financing as well.
  • Goldman Sachs and UBS place new convertible bonds and
    the public repurchase offer for existing convertible bonds by
    Basilea Pharmaceutica Ltd
    : On 28 July 2020, Basilea
    completed the offering of approx. CHF 97m 3.25% convertible bonds
    due 2027 to finance the repurchase of a part of Basilea’s
    existing convertible bonds due 2022. With the repurchase of part of
    its existing bonds financed by newly issued bonds, Basilea was able
    to extend its debt maturity profile and to optimise its debt
  • The Swiss Re Group updates its USD 10bn Debt Issuance
    Programme, issues EUR 800m Guaranteed Subordinated Notes and SGD
    350m Guaranteed Subordinated Notes
    : The Swiss Re Group has
    updated its USD 10bn Debt Issuance Programme, and thereunder has
    issued (i) EUR 800m Guaranteed Subordinated Fixed Rate Reset Step-
    Up Callable Notes with a scheduled maturity in 2052, and (ii) SGD
    350m Guaranteed Subordinated Fixed Rate Reset Callable Notes with a
    scheduled maturity in 2035.
  • Idorsia Ltd completes a capital increase: On
    23 October 2020, Idorsia completed a capital increase by way of an
    at-market rights offering. The offer price was set at CHF 22.50 per
    share and the capital increase resulted in gross proceeds of
    approx. CHF 535.5m. Idorsia intends to use the net proceeds of
    approx. CHF 520m to support the regulatory filing and, if approved,
    commercial launch of daridorexant and to fund the further
    development of its diversified pipeline.

Real estate transactions

  • Conzzeta sells residential properties to PLAZZA
    : The pension funds of Conzzeta completed the process of
    selling their residential properties in the “Tiergarten”
    quarter and at other locations in and around Zürich. In the
    context of the sale, PLAZZA decided to exercise its pre-emptive
    right as landowner and to acquire the two residential properties in
    the “Tiergarten” quarter at a price of CHF 61.1m.
  • Syngenta Crop Protection AG acquires a production
    facility from Novartis
    : In September 2020, Syngenta, a
    global leading chemical crop protection company, acquired a
    production facility located on the GETEC PARK.SWISS area from
    Novartis Pharma Schweizerhalle AG.
  • Implenia AG and Ina Invest Holding AG: On 12
    June 2020, Implenia completed the spin-off of Ina Invest Holding
    and the shares of Ina Invest Holding were, after a concurrent
    capital increase, listed on the SIX Swiss Exchange. Ina Invest
    Holding is a Swiss real estate company whose entire portfolio shall
    be developed and realised according to the highest sustainability
    criteria. In parallel, Ina Invest Holding completed a rights
    offering and raised CHF 116m.

Click here to continue reading . . .

Originally published by Corporate Tax 2021, Global Legal
Group, Ninth Edition, 2021.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Tax from Switzerland

UK Tax Round Up

Proskauer Rose LLP

The Chancellor presented the Budget on 27 October. Although it contained a wide range of general spending and tax-related announcements, there was nothing of significance for the private funds industry that had not been previously announced.

Pension Death Benefits

Albert Goodman

A common misconception with pensions is that they cease to exist on death. However, when you die, your personal pension scheme could provide benefits to your financial dependents…

Transatlantic Thinking Case Study

Withers LLP

Whilst most people understand the importance of having a will and estate plan to safeguard their family’s future, making a will can remain all too often on the ‘to do list’.

Related Articles