Tax relief for Geneva entrepreneurs' work tools

Geneva reduces taxation on the working capital of its entrepreneurs

From 2025 and subject to certain conditions, Geneva entrepreneurs will be able to benefit from a reduction in wealth tax on their company's shareholdings. 

Background:
This measure represents an additional step enabling Geneva to align itself with the practice already in place in the other Cantons of French-speaking Switzerland and thus enhance and support entrepreneurship.  Until now, entrepreneurs have been subject to unfair double taxation on their working assets. Firstly, the company they own is taxed on its profits and capital. When a dividend is paid out, it is taxed again as income for the shareholder and on his or her assets. The double taxation of income was already reduced in 2009 with the second corporate reform (RIE II). The introduction of the new article 59a LIPP in 2025 will make it possible to apply a reduction in this double taxation at the level of wealth tax this time.

The measure:
In order to take into account criticism of a tax gift to a limited number of the Canton's wealthy, the Grand Conseil has decided that this reduction will be reduced to 40% for values in excess of CHF 10 million.

The reduction is determined according to the following scale:

Conditions:
In order to benefit from this reduction, the taxpayer must meet the following cumulative conditions:

• The shares must not be listed on a stock exchange or regularly traded on an off-market.
• The entrepreneur must hold at least 10% of the company's share capital or registered capital in his private assets, either directly or indirectly;
• The taxpayer is primarily engaged in a dependent gainful activity in the said company.

It is important to note that the simple fact of being a director is not considered to be a dependent gainful activity on a principal basis. In addition, self-employed investors and self-employed persons who are not organised as a public limited company or a limited liability company will not be able to claim this relief.

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