A world of opportunity - Ernst & Young - Switzerland

Ernst & Young Monthly News May 2008

Media

Another strong year for Swiss Biotechnology

(Presse release, English, German, French)

Zurich, 8 April 2008 - Swiss biotechnology saw new records set in 2007 with regard to total revenue, R&D success and new capital raised. These are only some of the highlights in another strong biotech-year.

OFAC Sanction Regulations: The Underestimated Risk for Insurance Companies

(PDF, English, 315 kB)
Source: INSURE, Issue 2 2008
Author: Michael Faske, Ernst & Young

An insurance company with incorporated entities in the US issues a health insurance policy to a citizen of Cuba and a policy to cover an international hotel chain’s properties in Tehran, Iran. In addition, a marine cargo or “goods in transit” policy has been issued insuring a shipment of Iranian crude oil shipped from Egyptian ports to a Spanish buyer. Are these OFAC violations or not?

“We don’t have any pact with the major banks”

(PDF, German, 147 kB)
Source: Handelszeitung | no. 14 | April, 2–8, 2008
Author: Pascal Ihle, Ernst & Young

Peter Athanas, CEO of Ernst & Young Switzerland, predicts tough times ahead for auditors. Why? Because, in the aftermath of UBS' latest write-offs of billions, the man in the street is going to wonder: “What were the auditors doing?” In Athanas’ view, technically speaking, they were doing everything right.

Absolute return & Lex Helvetica – Cadre légal suisse (Absolute return and Swiss law – Statutory framework conditions in Switzerland)

(PDF, German, French, 167 kB)
Source: BANCO – Savoir investir, (BANCO – Smart investing), special edition of issue no. 9 • April 2008
Authors: Marc Siegel, Mathias Meystre, Ernst & Young

Although Absolute Return Management is not defined in law, it is a strategy that Swiss law allows certain types of collective investment to adopt.

The latest developments in German tax legislation

(PDF, German, 147 kB)
Source: SteuerRevue (Tax review), 5/2008
Author: Heiko Kubaile, Ernst & Young

The issues discussed in this article are:

• Article 8b para 5 of the Law on Corporation Tax violates free movement of capital in the EU - and other things besides
• Valuing foreign assets at market value goes against EU law
• Current state of German double taxation agreements

Tax exemption for legal entities with public or charitable purposes)

(PDF, German, 258 kB)
Source: Der Schweizer Treuhänder 4|2008
Authors: Walo Stählin, Natalie Nyffenegger, Ernst & Young

Practice Notes published by the Swiss Tax Conference: despite numerous court rulings and the Federal Tax Administration’s Circular no. 12 (KS12), published on 8 July 1994, the practice of the individual cantons is to this day inconsistent where the exemption of legal entities with public, charitable or cultural purposes is concerned. That is why the Swiss Tax Conference, responding to the results of a survey conducted in the cantons on 18 January 2008, has published practice notes for the cantonal tax authorities with the object of harmonizing the divergent practices of the cantons in relation to tax exemption and the deductibility of donations.

Tax law, fiscal justice and morals

(PDF, German, French, 127 kB)
Source: Der Schweizer Treuhänder 4|2008
Author: Stephan Kuhn, Ernst & Young

The political debate currently raging around issues of international taxation often presents us with moral questions. The “tax dispute” with the EU is one example: Is the practice of certain business profits not – by reason of a tax privilege – being subject to full taxation at cantonal and municipal level morally defensible? The supply of information to foreign states is another: is there any moral justification for not punishing tax evasion under criminal law, for denying information to foreign states and failing to help them to enforce their own laws where their own taxpayers are concerned?

The new rules on the place of performance in the EU

(PDF, German, 268 kB)
Source: Der Schweizer Treuhänder 2008|4
Author: Christina Rinne, Ernst & Young

VAT package adopted by EU Council of Ministers – By adopting its VAT package in relation to cross-border services, the EU is putting into effect the principle of taxation in the country of consumption and doing away with the distortions of competition between Member States caused by divergent tax rates.

China’s tax reform creates more incentives

(PDF, German, 36 kB)
Source: NZZ, April 10, 2008, no. 83
Authors: Kerstin Heidrich, Rainer Hausmann, Ernst & Young

The age of preferential treatment for foreign investors is coming to an end.

Legislative agenda 2008/1

(PDF, German, 2.64 MB)
Source: Institute of Public Finance and Fiscal Law 2008
Authors: Rainer Zigerlig, Heinz Baumgartner, Raoul Stocker, Ernst & Young

Federation / Cantons / Double Taxation Agreements (Armenia; The Netherlands)

Swiss Income and Corporate Income Tax Legislation Applied to International Partnerships – part 2

(PDF, German, 4.72 MB)
Source: Institute of Public Finance and Fiscal Law 2008
Authors: Peter Brülisauer, Marcel R. Kriesi, Ernst & Young

Spezifische internationale Fallkonstellationen (Geschäftsbetrieb in der Schweiz; Geschäftsbetrieb im Ausland) / Conclusio

Make your bed and earn from it

(PDF, German, 988 kB)
Source: Immobilienbusiness, 3/2008
Author: André Mathis, Ernst & Young

Despite the financial crisis, hotels are still attractive investments in Switzerland. Tougher competition and widespread structural problems mean that now is the time for hoteliers to take action.

Latest developments in the intercantonal dimension of real estate taxation

(PDF, German, 77 kB)
Source: Baurecht, 4/2007
Authors: Isabelle Seiler, Pascal Duss, Ernst & Young

The Federal Court has just abandoned the long-standing legal doctrine on what was termed the “distribution loss principle” in connection with the intercantonal aspects of real estate taxation. The article uses numerous examples to highlight how this innovation is going to work in practice.