I am the sole shareholder of an offshore EU corporation. To this date, all earning have been retained by the corporation. Where do I record this on my Swiss return?
I assumed line 5.3, and in the worksheet, "Vermoegen Betrag" being the value of the company per end of year (or should it be paid-in capital + retained earnings) and the Einkommen betrag "0" because we did not technically earn income yet ...
Any guidance is helpful. I need this urgently as we need to give in to the bank for a mortgage. I don't need the income per se for the mortgage. They are more interested in seeing our assets.
If it's properly incorporated (not some kind of sole tradership etc), and didn't pay you dividends, didn't dissolve, didn't do you any special disguised remuneration favors like zero-interest loans, then clearly it's zero income from it. Valuation can be more tricky but even if you get it wrong you can file corrections later, no questions asked, no penalties for late filings etc, so no urgency here really. And bank's going to scrutinize your valuation further if it's non trivial part of your wealth and should it matter for their decision to loan to you
Non-quoted shares in a legal entity company, including a GmbH, would normally be placed on the shareholder's WV Wertschriftenverzeichnis form in the Ct. Zurich tax filing. The valuation should be the market value but, absent that, the book value could likely be used from the company's 2021 financial statements. Since dividends were not paid in 2021, there would be no earnings to report on the shareholder's WV form for the legal entity.
After putting it in the form available at 5.3 as I assumed above, no extra income was recorded, but it did appear on the WV form, which is perfect. We will submit the detailed financial statements also so that they can see for themselves how the business is doing.
There's an official document somewhere but I can't remember what it's called now. The Swiss have different ways of estimating the book value for different types of companies. It's often a 1/3 of 2*income + assets or something like that.
If you want to big it up for the mortgage then put assets less any tax liability.
Line 5.3 is intended for income from undistributed company shares (and undistributed inheritance (estates)). This line could be considered if there are special situations to receive company shares, e.g., stock compensation. Otherwise, shares in a company should appear on the WV Wertschriftenverzeichnis or DA-1, imho.
Depending on how important a properly supported valuation is, this Swiss Tax Commission "Guidance on the valuation of securities without market value for the wealth tax" could be useful (German):
Thanks, in my case, the valuation is not very important. For no good reason, we did not do a return for 2020, but the bank asked for our theoretical return, (we overpaid taxes by 20% for not filing ...).
Bottom line, by having it on the itemized return (it shows up in "vermoegen in in- und ausland"), we can now show the bank the detailed balance sheets from all the years, which for our purposes, are great.