I. Income Tax

1. Time of Taxation and determination of taxable income Unlisted employee options are taxed at the time of issuance. If such employee options are given free of charge or on preferential terms, the positive difference between the market value and the sale price represents taxable income for the employee.

2 All other employee options are taxed at the time of sale or exercise. The total proceeds from the sale or exercise profit after deduction of any production costs are taxable.

2. Import of employee options in international relations

1 Imported employee options are those that an employee has been allocated in another country, brings with him when moving to Switzerland, and is realized here for tax purposes.

2 Imported employee options, which according to this information sheet are to be taxed upon allocation, can be implemented tax-free in Switzerland.

3 Imported employee options, which are to be taxed according to this information sheet when sold or exercised, are generally taxed in Switzerland.

4 If the imported employee options are subject to subjective conditions, according to which the employee must first earn or earn the employee options, only that part of the non-cash benefit achieved is taxed as earned income – subject to progression – which can be attributed to work performed in Switzerland or was earned in Switzerland. The income from work that is taxable in Switzerland is calculated as follows:

II. Wealth Tax

1 Free listed employee options are subject to wealth tax from the time they are issued. The market value (stock market closing price) at the end of the tax period is decisive.

2 All other employee options that are taxable at the time of exercise or sale are not subject to wealth tax during their holding period.

3 Legacy employee options that were taxed before January 1, 2013, upon surrender or vesting are subject to a wealth tax at the market value calculated using financial mathematics at the end of the tax period, but at least at the intrinsic value (difference between the market value of the underlying security and the exercise price).

D. The Taxation of Corrupt Employee Shares

I. Income Tax

1. Time of taxation and amount of taxable income

1 Non-cash benefits from the granting of non-genuine employee participation are only taxable at the time they accrue.

2 The entire pecuniary benefit after deducting any production costs is subject to income tax as earned income.

2. Import of non-genuine employee participation in international relations

The provisions on the import of entitlements to the acquisition of employee shares (BI 7.2) apply analogously to the import of non-genuine employee participation.

II. Wealth Tax

False employee participation is not subject to wealth tax as they do not constitute definitively acquired assets.

E. Obligations to Cooperate

I. Employer

1 The certification requirements are based on the MBV.

2 The obligation to provide certification is deemed to have been fulfilled in a legally sufficient manner if the employer reports the employee participation by the requirements of the MBV in the wage statement and on the supplement to the wage statement.

3 If in exceptional cases, the pecuniary benefit is not realized until after the employment relationship has ended, the employer concerned must provide the cantonal tax office with a certificate within the meaning of Section 137a StG and Art. 129 para. 1 let. d DBG directly.

4 If there is a preliminary ruling (E. III.) regarding the taxation of employee shareholdings, the cantonal office that issued the preliminary ruling and the date of the preliminary ruling must be noted on the wage statement.

II. Taxpayer

1 The taxpayer is responsible for the complete and correct declaration of employee participation received in his tax return.

2 Employee shares, freely listed employee options, and employee options that were already taxed at the time of sale or vesting before January 1, 2013, must be declared in the list of securities and credit balances at the market or formula value.

3 All other employee participations are to be listed “pro memoria” in the list of securities and assets, ie without value.

III. Preliminary decision between the employer and the tax authority (ruling)

1. General and Jurisdiction

1 Employer domiciled in the Canton of Zurich can submit their participation plans to the cantonal tax office for review and approval (ruling) to determine the relevant taxation date, as well as the individual valuations of shares.

2 Preliminary rulings from other cantons are recognized insofar as their content corresponds to this leaflet.

3 The following office is responsible: Zurich Cantonal Tax Office, Securities Department, Bändliweg 21, 8090 Zurich.

2. Requirements for a preliminary decision

1 All relevant planning and contract documents must be submitted to the responsible office. Based on these documents, the employer must carry out a tax assessment with precise reference to the relevant passages and submit a corresponding application.

2 The preliminary decision relates solely to the facts presented in the application. In principle, there is no further examination of the participation plan by the tax authorities.

3 If the advance decision is requested by a representative, the representative must provide a corresponding power of attorney from the employer.

3. Implementation of the preliminary decision

After the preliminary decision on the Tax Consultancy has been made, these must be included in the participation agreement. In any case, the tax authority assumes that the employee is aware of the tax consequences associated with employee participation.

IV. Contact Point

The contact point for specific questions regarding the implementation of this leaflet is the following office: Zurich Cantonal Tax Office, Securities Department, Bändliweg 21, 8090 Zurich.

V. Entry into Force

This information sheet is valid from the 2013 tax period and replaces the information sheet from the cantonal tax office on the taxation of employee participation for Zurich state and municipal taxes and direct federal tax. Read More

By Alice

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