Fines and bribes paid to private individuals should not be tax-deductible

Bern, 18.12.2015 - Companies should not be able to deduct fines and other punitive financial sanctions from taxes. The Federal Council initiated the consultation on a corresponding bill today. The Luginb├╝hl motion entitled "Tax deductibility of fines" (14.3450) should be implemented with the proposal.

The motion calls for a clear statutory basis for the tax treatment of punitive financial sanctions. The Federal Council is responding to this request with the bill. With the exception of tax fines, the tax treatment of fines, financial penalties and financial administrative sanctions has not been explicitly regulated for companies up to now. In the future, punitive financial sanctions and associated procedural costs are to be expressly non-deductible for tax purposes. The same should also apply for other expenses associated with offences. In contrast, non-punitive profit disgorgement sanctions are to remain deductible.

Alignment with more stringent criminal law on corruption

Parliament adopted a more stringent form of criminal law on corruption in September, resolving to regulate the punishability of bribery payments to private individuals in the Criminal Code as offences prosecuted ex officio. This does not apply for minor cases, which are to be prosecuted only upon request. Previously, private sector bribery was punishable only if it led to a distortion of competition. In order to harmonise criminal and tax law, the bill is proposing that bribery payments to private individuals should no longer be allowed as expenses that are justified for business purposes.

The bill makes provision for amending both the Federal Act on Direct Federal Taxation (DFTA) and the Federal Act on the Harmonisation of Direct Taxation at Cantonal and Communal Levels (DTHA). This will create an explicit statutory basis for federal and cantonal taxes.


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