Switzerland’s Foundation Law changed at the beginning of this year, thanks to a raft of statutory amendments which liberalised the regime. Under the Swiss federal tax law, the limit on tax deductions for donations to charitable foundations has been increased from 10% to 20% of the net income (natural persons) or the net profits (legal entities) of donors. The cantons are still allowed to set their own limits. Under the previous law, only cash contributions were deductible. Now, however, the value of donations of other kinds of assets is also deductible. Consequently, the making of other kinds of donations, especially real estate, intangible property (e.g. software) and artworks, will be simplified and promoted.
The law now recognises, for the first time, that charitable foundations do not render a service subject to VAT if they list the name of the donor and the name of his or her company or its logo in a neutral form in publications (such as advertising). The same applies if the beneficiary of a charitable foundation refers to the charitable foundation in publications in the same manner. According to the revised laws, donations of money or property with a value of up to 20% of the net profits of a corporation, limited liability company or a mutual company to a charitable organisation may be justified as business expenses and should, therefore, not be considered a concealed profit distributed to a closely related third-party.
