The coronavirus (COVID-19) whilst causing concern and uncertainty also poses challenges to companies and individuals. In order to relieve some of the negative economic consequences, the Swiss government has introduced measures to address the effects of the pandemic.
How can annual general meetings be held under the current prohibition on events?
The ordinary general meeting must take place within six months of the end of the financial year. However, the OGMs of both listed and private Swiss companies, with shareholders physically in attendance cannot happen until at least April 19, 2020. For these reasons, the board of directors may also postpone a planned or already convened general meeting. Even if the period of six months is violated, the company will not face any immediate sanctions.
In the COVID-19 Ordinance 2, the Federal Council has issued a ground-breaking regulation under Art. 6a on company meetings: during the period of validity of this ordinance, Art. 6a enables Swiss companies of all sizes to hold their general meetings under simplified conditions whilst also complying with the current ban on holding meetings. The COVID-19 Ordinance 2 allows the board of Swiss companies the following two options:
The board may require shareholders, regardless of the expected number of participants and without observing the invitation deadline, to exercise their rights (i) in writing or electronically or (ii) by an independent proxy appointed by the company. When voting in writing or electronically, the voting instructions are addressed directly to the company and no proxy holder needs to be appointed. At least four days before the ordinary general meeting, the board of directors must communicate the order in writing or publish electronically (e.g. on the company’s website) and is entitled to decide, how the shareholders can exercise their voting rights. This means the board of directors of the company must inform the participants about the measures taken, so they are aware of the changed formalities and can prepare appropriately to exercise their rights. The same rules apply to meetings of partnerships, associations and cooperatives.
Commercial register entries
What are the possible consequences if commercial registry offices are closed due to the spread of the coronavirus?
Certain commercial registry offices have closed their counters. Consequently, all applications have to be filed by mail. In case a legalisation is required (e.g. registration of a new member of the board), a notary must still be consulted.
Should a commercial register not be able to register applications for the elections of new members of the board of directors, in this case, the election already comes into effect with the respective minutes of the general meeting and declaration of acceptance by the new member.
Tax relief measures
The Swiss government on 20 March 2020 announced the following special reliefs and arrangements for tax:
Federal, cantonal and communal taxes
- The payment deadlines for all tax invoices will be extended until 30 June 2020 for both individuals and companies. This applies to cantonal and communal taxes as well as direct federal tax.
- No interest on late payment will be charged for the period from 1 March to 31 December 2020. This applies to cantonal and communal taxes as well as direct federal tax.
- The Tax Administration will refrain from sending tax assessments and invoices until the end of April 2020.
Value-added tax (VAT)
- Companies may extend payment periods for VAT, customs duties, special excise taxes and incentive taxes, without having to pay interest. For this reason, the interest rate on late payments will be reduced from 4.0% to 0.0% from 21 March 2020 to 31 December 2020 and no interest on arrears will be charged.
The approach of the Swiss tax authority concerning relief on value-added tax (VAT) is the following:
- To benefit from tax payment deferrals, companies must file a written request in accordance with provisions of the VAT law, and this applies to all taxpayers including foreign companies with a Swiss tax representative. All applications must be submitted by email or post. No separate procedure is currently planned.
- There are currently no separate extensions to the deadlines for VAT refund procedures planned (i.e., the deadline concerning VAT incurred in the calendar year 2019 is still 30 June 2020).
Measures relating to debt enforcement
In accordance with Art. 62 of the Swiss Federal Law on Debt Enforcement and Bankruptcy (SchKG), the Swiss Federal Council declared a legal standstill as of 19 March 2020, 7 am. It will last until midnight on 4 April 2020, after which the statutory debt collection holidays begin, which last until April 19, 2020 midnight.
For the duration of the standstill, the performance of any debt enforcement activities against individuals and legal entities is prohibited. After the end of the standstill on 19 April 2020, the performance of debt enforcement activities will again be permitted.