In March 2020, the Swiss Federal Council enacted measures to combat COVID-19. These measures have been well implemented by the population. Its conduct avoided overloading hospital intensive care units. The number of new infections is stable or even declining. For this reason, the Federal Council intends to gradually relax the measures. From the 8th of June 2020, if the forecasts remain encouraging, all sectors of the economy should resume their activities.

Tax measures

• Possibility to extend tax payment periods
• Interest on late payment of taxes from March 20 to December 31st, 2020 has been reduced to zero
• Automatic extension of the deadline for submitting annual tax returns for 2019
• Deadline for submission of the VAT statement and payment VAT tax may be extended to 3 months after the expiry of the deadline.
• Some cantons (e.g. Geneva) provide for an extension of the deadline for tax at source rectification
• Specific tax measures related to COVID-19 may differ from one canton to the other
• The legal deadlines (deadline for lodging a claim against a tax decision) are not suspended and must therefore be respected
• Swiss withholding tax and stamp duty are not affected and that interest on arrears therefore continues to be due for these taxes in the event of late payment
• In Geneva canton
  • Deadline to submit individual and corporate tax returns: 31.05.2020
  • Deadline to submit tax at source rectification: 31.05.2020
  • Extension of deadline to request of information: 31.05.2020
  • Tax Bills and decisions postponed to 30.04

Social security measures

• Companies impacted by the crisis can request a temporary interest-free deferral of the payment of social security contributions (AVS/AI/APG/AC)
• Interest on late payment of social security contributions until September 2020, will be reduced to zero
• Companies have the possibility of adjusting the social contributions instalments in case of a significant reduction of total payroll (same as for the independent worker)
• Employers may temporarily use the employer’s contribution reserves for the payment of employee contribution to the LPP (pension) occupational benefit scheme

Employee and employer supportive measures

• Companies can benefit from partial unemployment for a reduction or even a cessation of their activity in connection with the COVID-19 epidemic.
• The employees should agree in advance for this measure, before the employer applies (amounts to 80% (for full-time employees) of loss of gain attributable to lost hours of work). If the application is accepted, the Employer receives reimbursement by the Unemployment Fund for the salaries paid. The decision is granted for (6) months and is renewable, if the crisis continues.
• Based on new decisions announced by the Federal Council on April 8, 2020, the rules on partial unemployment have been extended and simplified.
• Simplified notice request form and simplified statement form
• Deletion of the notice period
• Elimination of the waiting period
• Widening of the circle of employees entitled to RHT indemnities to include, apart from employees with a undetermined duration employment contract: additionally employees on call (provided that they have been employed for 6 months in the company or that their activity rate varies by max. 20%), salaried managers of the company and their spouses working in the company, temporary workers, workers on fixed-term contracts and apprentices
• Renewal of the notice request when the reduction in the work schedule lasts more than 6 months
• Removal of the limitation of 4 months of RHT compensation in the event of loss of work greater than 85%
• Elimination of the obligation to declare to the employer the income derived from another activity during the HTR and elimination of the taking into account of this income for the calculation of the loss of earnings

Business support

All self-employed people whose income subject to AVS contributions is between 10,000 and 90,000 francs are now entitled to the coronavirus loss of earnings allowance, in accordance with decisions announced on Thursday 16 April by the Federal Council. This allowance is intended for the self-employed who have suffered a loss of income because of the measures taken on March 13 by the Federal Council to combat the pandemic (closure or other loss of earnings).

The amount of the allowance corresponds to 80% of the annual income converted into daily gain. The daily allowance amounts to a maximum of 196 francs per day. The allowance is calculated on the basis of the most recent contribution decision for 2019. For this, the annual income is multiplied by 0.8 and divided by 360 days. For example, if your income was 45,000 francs in 2019, the allowance is therefore 100 francs per day (45,000 x 0.8 / 360 days = 100 francs / day).

The self-employed benefit from this allowance for a period of 2 months, from March 17 to May 16. This period is also valid for the self-employed who can reopen their business on April 27 or May 11.

Indemnification in the cultural sector

Loan requests (emergency aid to non-profit cultural enterprises) or compensation for financial losses (for-profit or non-profit enterprises; cultural actors) can be submitted from April 9, 2020 until April 30 2020 if possible, but no later than May 20, 2020.

Accounting/Audit implications

Companies benefiting from the COVID loans must follow strict rules about the use of the funds.

• Companies cannot pay any dividends
• Companies cannot lend funds to shareholder
• Received loans should be used to pay current expenses of the company

As auditor, we need to ensure that these rules are followed. If not, we need to make denunciations to the authorities that the funds are not properly used.

Of course, there is also the “Going Concern” problematic that should be addressed in both Accounting and Auditing side.

Bridging loans

In view of the current COVID-19 epidemic, the Federal Council has adopted a package of various measures, with the objective to helping companies in difficulty to benefit from liquidity.

The Federal Council has taken steps to provide businesses with access to bank loans. The loans COVID-19 (loans up to CHF 500’000) and COVID-19 PLUS (between CHF 500’000 and CHF 20’000’000) are put in place and provided by various banks.

COVID-19 loans are fully guaranteed by the Swiss state and interest-free, without guarantee or other collateral, repayable over (60) months in principle. Companies should be seated in Switzerland and created before March 1st, 2020, should have suffered considerable economic damage as a result of the COVID-19 pandemic, particularly in terms of turnover and should be financially healthy, i.e. not in bankruptcy or debt restructuring proceedings or in liquidation. If accepted, this loan is available within few hours, upon receipt of full set of documents by the bank.

COVID-19 PLUS loans are guaranteed by the Swiss state at 85% and interest of 0.5%, repayable over (60) months in principle. In addition to the conditions above companies should have requested for a COVID-19 loan before asking for a COVID-19 PLUS and pass a credit exam before. If accepted, this loan is available within few days, upon receipt of full set of documents by the bank.

Other

• Suspension of debt collection proceedings throughout Switzerland from March 19th to April 4th, 2020, in order to alleviate the situation of Swiss companies. During this period, debtors cannot be prosecuted
• No court hearing to be held between March 16th and April 19th
• Only urgent court hearings will be held from April 20th and henceforth