Tax step-up (Switzerland)

A Swiss tax step-up is a restructuring regime under which the latent capital gains on assets transferred in an intragroup reorganisation are recognised for tax purposes and may be amortised over 5–10 years — creating future tax-deductible amortisation that reduces future corporate income tax. It applies to companies transferring their registered office to Switzerland or emerging from special tax regimes. This mechanism is a key advantage in structuring international groups wishing to establish activities in Switzerland, allowing recovery of embedded goodwill through tax-deductible amortisation.

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Example: a French company transfers its management headquarters to Switzerland and obtains a tax step-up on its intangible assets valued at CHF 25.0 million (brands, patents, know-how). The step-up enables CHF 25.0 million amortisation over 10 years — CHF 2.5 million annual tax deduction generating CHF 297,500 in annual tax savings (11.9% effective rate) = CHF 2.975 million total savings over 10 years, a material benefit justifying the Swiss domicile choice.

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Hectelion analyses tax step-up opportunities in Swiss establishment structuring mandates, quantifying the fiscal benefit for international groups.