Tax planning consists of legally organising one's private or professional affairs so as to reduce the tax burden within the limits of the law and case law. In Switzerland, the multiplicity of taxation levels (federal, cantonal, municipal) and the richness of the available legal instruments — pension fund redemptions, tax rulings, restructurings, choice of domicile — offer numerous optimisation possibilities. PBM Avocats assists individuals, entrepreneurs and companies in Geneva and Lausanne in defining and implementing their tax strategy, with rigour and in strict compliance with the law.
Tax Optimisation for Individuals
For individuals, the main levers of legal tax optimisation concern pension coverage, deductions for actual costs and the structuring of income. Voluntary redemptions into the second pillar pension fund (art. 33 para. 1 let. d DFTA) constitute the most powerful deduction instrument: for a taxpayer with a high marginal tax rate, each franc redeemed can generate a significant tax saving. These redemptions must however be integrated into a long-term strategy taking into account the three-year lock-up period and the optimisation of the timing of capital withdrawal.
Annual payments to pillar 3a (tied individual pension provision, art. 33 para. 1 let. e DFTA) are deductible within the annual statutory limits. For self-employed persons without a second pillar, the deductible amount is substantially higher. Pillar 3a may be staggered across several accounts with different institutions to allow a phased capital withdrawal over several years, which allows the taxpayer to benefit several times from the privileged tax scale applicable to capital benefits.
Other deductions deserve attention: professional training and continuing education costs (up to CHF 12,900 per year under art. 33 para. 1 let. j DFTA), maintenance costs of private properties (choice between actual or flat-rate deductions), private passive interest and donations to recognised institutions of public utility.
Tax Rulings: Securing Transactions in Advance
The tax ruling is a valuable tool for securing the tax treatment of a transaction before it is carried out. It allows a formal position to be obtained from the tax authority — in principle binding on it if the taxpayer has complied with the information received — on questions such as: the tax treatment of a merger or demerger, the qualification of a service (taxable or excluded from the VAT scope), the conditions of a transfer of registered office, the valuation of a participation for the purpose of a contribution, or the conditions for applying a preferential regime (patent box, R&D).
The ruling request must be prepared with care: it precisely describes the facts, the planned transaction and the legal questions raised. It is filed with the cantonal tax authority (and, where applicable, the FTA for DFTA or VAT questions). The ruling does not replace the legal analysis but frames and formalises it. PBM Avocats prepares, negotiates and finalises tax rulings for its clients, ensuring coherence between the legal structure and the desired tax treatment.
Corporate Tax Planning and Restructurings
For companies, tax planning covers a broad spectrum: choice of legal form (AG, GmbH, sole proprietorship, partnership), structuring of remuneration (salary vs dividend), optimisation of provisions and depreciation, use of carried forward losses, and management of hidden reserves. The TRAF reform has introduced new instruments such as the patent box and the R&D deduction, which require rigorous documentation.
Company restructurings — mergers, demergers, branch contributions, asset transfers — may be carried out in tax neutrality if the statutory conditions are met (art. 61 and 19 DFTA, FTA Circular No. 5). Planning a business succession is a particularly complex area, combining tax law, succession law and company law. PBM Avocats intervenes at an early stage to structure the transfer in a way that minimises tax burdens and respects family balances.
Choice of Domicile and Inter-Cantonal Tax Mobility
In Swiss law, the free choice of domicile is constitutionally guaranteed. The significant differences in tax burden among cantons and municipalities create legal inter-cantonal tax mobility. Transferring domicile to a canton with a more favourable tax regime may represent a substantial tax saving, provided that the new domicile is genuine and that the taxpayer truly severs their ties with the former canton.
The cantonal tax authorities may contest a change of domicile if they consider it fictitious or that the centre of vital interests has remained in the former canton. PBM Avocats advises you on the precautions to take so that a change of tax domicile is unassailable, notably by rigorously documenting the elements of attachment to the new canton from the first day.
Frequently Asked Questions on Tax Planning
What is the difference between legal tax optimisation, tax avoidance and tax evasion?
Tax optimisation (or legal tax planning) consists of organising one's affairs so as to use the instruments that the law makes available to reduce the tax burden: redemptions into the pension fund, payments to pillar 3a, choice of legal form, timing of income or expenses. Tax avoidance (Steuerumgehung) is a case-law concept: it targets cases where the taxpayer adopts unusual and inappropriate legal forms for the economic reality, for the sole purpose of saving tax (art. 22 DFTA for legal entities; general principle developed by the Federal Supreme Court). Avoidance is sanctioned by reclassification of the transaction according to its true economic substance. Tax evasion (art. 175 DFTA) is an offence consisting of concealing income or assets, punishable by a fine of up to three times the evaded tax.
What is a tax ruling and how does one obtain it?
A tax ruling is a prior agreement between the taxpayer (or their representative) and the cantonal tax authority on the tax treatment of a planned transaction. It is not formally regulated by a specific law but rests on the constitutional principle of good faith (art. 9 FC). The ruling request is addressed in writing to the competent cantonal tax authority, precisely describing the planned transaction and requesting a position on its tax consequences. The authority generally responds in writing, and its response is binding on the administration if the taxpayer acted in accordance with the information received, except in the event of legislative change or communication of erroneous facts. PBM Avocats prepares and negotiates tax rulings on behalf of its clients, both in Geneva and in Lausanne.
How to optimise the taxation of a shareholder-director's remuneration?
The salary/dividend ratio question is central for shareholder company directors. A high salary is deductible from the company's profit and reduces corporate income tax, but is fully taxed as income in the hands of the director and subject to social charges (OASI/DI/IC, OPA). A dividend does not bear social charges and benefits from partial taxation (art. 20 para. 1bis DFTA, 70% taxation for shareholdings of at least 10%), but is not deductible from the company's profit. Optimisation depends on cantonal rates, the director's personal tax brackets, family situation and pension objectives. There is no universal solution; each situation must be analysed individually.
Are redemptions into the pension fund always tax-advantageous?
Voluntary redemptions into the second pillar pension fund (art. 33 para. 1 let. d DFTA) are deductible from taxable income up to the amount of the actual redemption, without a theoretical ceiling (within the statutory maximum pension coverage). This is one of the most powerful deduction instruments available in Swiss tax law. However, anti-abuse rules exist: if funds from a redemption are withdrawn as capital within three years following the redemption, the deduction is refused or recovered through back tax assessment (art. 22 para. 1 OPA 2). The planning of redemptions must therefore be integrated into a coherent retirement strategy, taking into account the lock-up period, the retirement horizon and the overall patrimonial objectives.
How does a tax-neutral company restructuring proceed?
Company restructurings (mergers, demergers, transformations, contribution of participations, asset transfers) may, under certain conditions, be carried out without triggering immediate taxation. In federal law, art. 61 DFTA (for legal entities) and art. 19 DFTA (for individuals pursuing a self-employed activity) provide for a deferral of taxation on hidden reserves on condition that the tax-determinative value is maintained, that the assets remain subject to Swiss tax sovereignty and that lock-up periods are respected. FTA Circular No. 5 sets out the detailed conditions for restructurings of legal entities. PBM Avocats assists you in the structuring and execution of these transactions.