Foreign fines tax-deductible in exceptional cases from 2022
Bern, 11.11.2020 - At its meeting on 11 November 2020, the Federal Council brought the Federal Act on the Tax Treatment of Financial Sanctions into force with effect from 1 January 2022.
As in the past, domestic punitive financial sanctions, i.e. fines, monetary penalties and punitive administrative sanctions, are not tax-deductible. In contrast, foreign punitive financial sanctions are to be tax-deductible in exceptional cases if they violate Swiss public policy or if a company credibly demonstrates that it has taken all reasonable steps to comply with the law.
Bribes paid to private individuals are no longer tax-deductible. This harmonises tax and criminal law. Finally, expenses that make a criminal offence possible or are paid in return for one being committed are no longer tax-deductible.
On 19 June 2020, Parliament adopted the law by 142 votes to 101. The referendum deadline expired unused on 8 October 2020. The bill stipulates that the Federal Council will determine the date on which the Act enters into force.
Once the Act comes into force, Switzerland will be complying with a recommendation of the OECD's Financial Action Task Force on Money Laundering.
The Federal Act on the Tax Treatment of Financial Sanctions implements the Luginbühl motion (14.3450) entitled "Tax deductibility of fines". This motion had called for punitive domestic and foreign sanctions to be non-tax-deductible.
Address for enquiries
Joel Weibel, Communications Specialist /
Federal Tax Administration FTA
Tel. +41 58 464 90 00, email@example.com