The ten-year tax loss carry forward period:

A closer look at Switzerland’s proposal

Switzerland is moving to modernize its tax framework, potentially. The Federal Council published its draft law and the corresponding dispatch on extending the tax loss carry forward period from seven to ten years at its meeting on 27 November 2024 . This change would allow businesses more time to offset prior losses against future profits, aligning better with the realities of long business cycles.

For investors, this is highly relevant as it impacts corporate financial stability, deferred tax asset recognition, and long-term profitability.

In this section we explore the proposed extension, compares Switzerland’s approach with other jurisdictions, and analyzes the broader implications for businesses and investors alike.

The change would be particularly relevant for industries with long investment cycles, such as technology, biotech, pharma, and infrastructure, where profitability often takes years due to significant upfront costs. It also addresses challenges caused by economic disruptions like COVID-19 and highlights the need for measures that reduce the risk of losses expiring unused.

Globally, tax systems vary widely. While some allow indefinite tax loss carry forwards or include carry back mechanisms, these are often paired with minimum taxation requirements to ensure a baseline contribution.

While Switzerland does not offer indefinite carry forwards or carry back options, the additional flexibility would make its tax framework more competitive compared to the current seven-year limit.

This proposal would offer businesses and investors new opportunities for:

Increased flexibility for long-cycle industries: Companies in sectors with delayed profitability can better match losses with future profits, reducing taxable income over an extended period.
Better alignment with cash flow needs: A longer carry forward period stabilizes income, helping companies manage taxes during volatile cycles.
𝐑𝐞𝐜𝐨𝐠𝐧𝐢𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐃𝐞𝐟𝐞𝐫𝐫𝐞𝐝 𝐭𝐚𝐱 𝐚𝐬𝐬𝐞𝐭𝐬 by increasing recognition opportunities, reducing write-down risks, and necessitating international alignment for cross-border tax coordination

Discover how this proposal impacts tax planning, deferred tax assets, and long-term strategies in the Newsletter:

𝐖𝐞𝐚𝐥𝐭𝐡 𝐩𝐥𝐚𝐧𝐧𝐢𝐧𝐠 𝐰𝐢𝐭𝐡 𝐜𝐫𝐲𝐩𝐭𝐨 𝐚𝐬𝐬𝐞𝐭𝐬

This Investor Monday, we are diving into the essentials of wealth planning with crypto assets.
A clever, thought-through approach can help you navigate tax implications, protect your assets, and create opportunities for growth.
𝐇𝐞𝐫𝐞 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐭𝐡𝐫𝐞𝐞 𝐤𝐞𝐲 𝐭𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬:

Timing: In a volatile market, timing transfers whether for gift, donation or inheritance purposes can be crucial in light of potential tax implications
Create stability and control: The right structure provides the flexibility to manage volatility, secure stable transfers, and align with long-term goals --> think trusts, foundations, and diversified portfolios.
Growth Potential: A carefully balanced portfolio that includes high-growth and stable assets is essential. A strategic mix from cryptocurrencies and stablecoins to NFTs helps to shield wealth from market swings while allowing for value appreciation over time

Want to make the most of your crypto wealth?

𝐑𝐞𝐚𝐝 𝐭𝐡𝐞 𝐧𝐞𝐰𝐞𝐬𝐭 𝐠𝐮𝐢𝐝𝐞 𝐡𝐞𝐫𝐞:

And reach out directly to get started!