The Swiss Federal Government has already introduced a number of measures to assist businesses in Switzerland (a good summary is available in French from the RTS site). Some key aspects to take into consideration in different Cantons are:

  • The suspension of interest payments for late payments of Cantonal & Communal taxes & a very softened approach to making staged payments of 2020 taxes
  • Switzerland has a strong tradition of allowing companies to make provisions in their accounts (art. 960a al. 4 CO & art. 960e al. 3 ch. 4 CO) which helps shield them from taxes in certain years and build reserves for “rainy days”. In Valais companies have been allowed to make such provisions in their 2019 accounts which much then be dissolved in 2020. Other Cantons have generally not followed this, although there are other ways to make other non specific provisions.

Many companies will likely need a financial remediation in 2020. This can involve raising new capital in the form of a loan, taking care not to overindebt the company, or else issuing new equity. Other solutions can include renegotiating existing loans and also having creditors agree to a reduction of their existing receivables.

The loans of up to CHF 500,000 guaranteed by the federal government which can be applied to through banks are actually also envisaged to be a sort of off-balance sheet form of financing and will not be taken into consideration when calculating whether a company is overindebted until 31 March 2022 (section 24 of the COVID-19 guarantee order).

At this time many companies will need to focus on their cash flow, and optimising their tax payments can form a part of this strategy. Each individual case needs to be considered to find an optimal solution, taking into account the interests of the company and its shareholder(s).

Given the important nature of these recent events companies may also need to consider in their reports post balance sheet date reviews of the situation and whether the company can be expected to continue as a going concern, depending on how likely the pandemic is likely to affect their business.

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