Swiss companies will no longer be able to deduct bribes paid to private individuals from their taxes, Switzerland’s government said Wednesday, according to an update of tax laws due to take effect
Swiss companies will no longer be able to deduct bribes paid to private individuals from their taxes, Switzerland’s government said Wednesday, according to an update of tax laws due to take effect on Jan. 1, 2022.
Beyond bribes, costs from financing criminal activities or money paid in return for a crime to be committed will also no longer be tax deductible once the legislation takes effect after next year, the government said.
The Alpine country, famed for its historic practices of banking secrecy and as a haven for money from abroad, will leave some wiggle room for certain offenses to remain tax deductible, however, with foreign fines to be tax-deductible in exceptional cases from 2022 when the fines violate Swiss public policy, the government said.
“As in the past, domestic punitive financial sanctions, i.e. fines, monetary penalties and punitive administrative sanctions, are not tax-deductible,” the government said. “In contrast, foreign punitive financial sanctions are to be tax-deductible in exceptional cases if they violate Swiss public policy or if a company credibly demonstrates that it has taken all reasonable steps to comply with the law.”
Once the changes take effect, Switzerland said, it will be complying with a recommendation of the OECD’s Financial Action Task Force on Money Laundering.
The wealthy republic has only tentatively lowered the legal boom on bribery over the last two decades, including a move to criminalize bribes to foreign public officials starting in the early 2000s.
In 2001, Switzerland banned the deduction of bribes paid by companies to public officials from their taxes.
The push to ban bribery of private individuals, in the works for several years and now punishable only in instances where it distorts competition, has taken longer amid opposition from some political parties to changes.