6 INCOME TAXES – SWISS TAX REFORM
On May 19, 2019, the Swiss electorate passed the Federal Act on Tax Reform and AHV Financing (TRAF). The tax reform abolishes the tax regimes for holding, domiciliary and mixed companies as of January 1, 2020 and introduces new tax calculation principles. As part of the TRAF and cantonal tax practice, transitional measures were introduced in order to ease the transition from the current reliefs to the new tax calculation principles. For the Group, these measures allow amongst others the tax-effective amortization of a step-up amount over a period of up to 10 years. As a consequence, the Group started to capitalize corresponding deferred tax assets in 2019.
Deferred tax assets capitalized in connection with the step-up amount:
Balance at January 1
Write-off deferred tax asset for corresponding tax benefits received in current period
Recognition of deferred tax assets for tax benefits in future periods (non-recurring)
Balance at June 30
The calculation of the deferred tax assets related to the Swiss tax reform required management to make significant estimates and assumptions. The final outcome is still uncertain and might lead to adjustments in future years.