Switzerland

Last modification: 22 oct 18
Introduction: 

Switzerland is a shining example to Brexiteers : a stable, prosperous economy in Europe, but outside the EU. The Alpine confederacy is a mecca for banking, insurance and precision machinery. Switzerland is a small, landlocked country that has no natural resources, and relies on its highly specialized labour force, innovative industries and advanced trading skills to produce growth. Switzerland has one of Europe’s highest levels of labour productivity. 

Chapter 1: Economic and business environment

Demographics

8.3 million

Capital

Bern

Major cities

Geneva – Zurich - Berne

Languages

French, German, Italian

GDP

 $59,150

Unemployment rate

4,5%

Main industries

Machinery, Chemicals, Watches, Textiles, Precision Instruments, Tourism, Banking, Insurance

Currency

Swiss Franc (CHF)

Interest rate

-0.75%

Political key info

Federal republic with strong elements of direct democracy

Inflation

-0,01%

Chapter 2 : Automotive market, segments & sales

Total Car park

4.5 million (6.13 million with vans, trucks, bus, …)

New vehicle registrations (Cars, LCV, Trucks)

 98,608 (April ’18)

Top 5 brands (total market)

VW-Mercedes- BMW-Skoda-Audi

Chapter 3: Company car market

Total Fleet Park (company cars)/Fleet penetration in total fleet sales

In Switzerland, newly licensed vehicles are not registered according to their commercial use. Therefore, there currently is no detailed data on the Swiss fleet market. The figures used here are estimates from Fleetcompetence Europe.

Top 5 fleet brands (fleet market)

Skoda  – VW - Mercedes – Audi - BMW

Fleet Model preference top 5 (fleet market)

 Octavia – Golf – Polo – C Class – Touran

Chapter 4: Taxation & legislation

Annual circulation tax (cantonal): the so called "Verkehrsabgabe" needs to be paid, if you own a car.

This can be a private person or a company. The amount of the tax depends on the canton in which the car is officially registered. Most cantons calculate the "Verkehrsabgabe" on the cubic capacity and the weight of the car. The "Verkehrsabgabe" needs to be paid annually. Certain cantons have special tax exemptions for electric powered cars.

An exact list for the cantonal tax reductions can be reached under the following link:

http://www.bfe.admin.ch/energieetikette/00886/02038/index.html?lang=de&dossier_id=02083

Car tax (federal): There is no direct federal car tax in Switzerland. The only kind of federal tax is the annual fee which needs to be paid for the usage of the Swiss highways. The holder of the car needs to pay the fee. The fee is CHF 40.00 for vehicles up to 3.5 tons. Vehicles heavier than 3.5 tons need to pay the heavy traffic fee, certain vehicles are exempted from the heavy traffic fee based on their usage.

CO2 duties (federal): The tax is calculated on the CO2 emission and on the weight of the car. An exact calculation for the tax can be calculated under the following link:

http://www.bfe.admin.ch/themen/00507/05318/05535/index.html?lang=de

For the calculation, the type of fuel (Diesel, natural gasoline etc.) needs to be filled in. Furthermore the brand, the weight, the CO2 emission by kilometer and the year of registration of the car need to be completed as well.

This is a non-recurring tax, which is included in the price of the car.

 

VAT-deduction: If the company is registered for the VAT and is taxed by the normal system, the VAT on the purchase price can be claimed back in the VAT declaration if the company is allowed to claim back input VAT. If the car is leased, the VAT on the periodical leasing invoices can be claimed back in the VAT declaration (if the company is registered for VAT and allowed to claim back input VAT). If the car is used for the company along with a use in private, there needs to be separated between legal persons (corporations etc.) and self-employed persons. In the situation where the company car is owned by a legal persons VAT needs to be declared on the amount of benefit in kind. If the company car is used in a self-employed business, a correction of the VAT on the private part of the business car is required. The share of the private use of the company car must be taken into account on the salary certificate of the employee. The share of private use is a taxable event. The taxable basis can either be calculated effectively or with a flat-rate. Most companies choose the flat-rate approach because of its simplicity: from the purchase price of the car, there is 0.8% added on the monthly salary to cover the private use of the car (9.6% annually, calculated on the purchase price of the car exclusive VAT). If the effective method is chosen, the employee must fill in a driver's logbook to separate between driven kilometers for business use and private use of the car.

 

Income taxes – drivers’ personal taxation

The company car does not need to be declared in the private tax return. The car needs to be listed with its current value by the end of the year. Costs for a private car like insurances and fuel costs cannot be deducted in the private tax return.

If the car is required for work, the way from home to the office and back can be deducted on a basis of CHF 0.70 by kilometer if the effective method is chosen. In case of the flat-rate method, the deduction cannot be made because the costs for commuter traffic is deemed to be paid by the employer.

If the employee gets allowances paid for business kilometers, which he paid by himself in first place, those payments are not relevant for the taxable income (effectively reimbursed expenses).

 

 

Sinds 2015 the new EU-regulation imposes tough restrictions on the private use of company cars by crossborder commuters domiciled in the EU. The private use of the company car is only permitted if customs on the car are paid in the EU. In many cases, the foreign VAT paid there will be refunded. Issued as early 2016, the new Swiss regulation of the tax basis regarding commuting, stipulates that only a maximum of CHF 3,000 of those costs can be deducted from taxes – equivalent to a one-way distance of 10km. For company car drivers, all costs in excess of this maximum will be added to their taxable income.  

Chapter 5: Car policies

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Chapter 6: Funding methods

According to Arval’s Corporate Vehicle Observatory 2015, the ratio of car lease funding has stagnated at a low level. Long-term or operating leases account for just 12% market share, with finance lease at 26%, the lowest level since the market survey. In contrast, purchasing as a means to finance the company cars remains at 60%. Corporate use of outsourcing services also remains low. One of the main reason is that the Swiss fleet market is heavily dominated by SMEs. Swiss companies tend to have ample financial reserves, so buying rather than leasing does not present a cash-flow problem. Despite of those reasons, a slightly increased demand for full-service leasing for premium vehicles has been reported.

Customer requirements have definitely increased, and make enquiries regarding Full-Service Leasing more complex.

Besides purchasing, leasing or renting, corporate car-sharing is another option for business mobility gaining still more in popularity in Switzerland. This option not only saves money, but also time spent on administration. Car-sharing is eco-friendly, more transparent, efficient and affordable than organizing mobility internally.    

Chapter 7: Fuel

  • Fuel type segmentation : one out of every three cars is a diesel, in fleet is nearly 49%. One out of every 25 new passenger cars sold have a “green” powertrain. Eco cars are however picking up the pace : in 2012, they represented just 2,3% of the new car market.

Chapter 8 : TCO components

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Chapter 9: Safety, insurance and telematics

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Chapter 10: Environment

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Chapter 11: Mobility

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Chapter 12: Key trends to watch

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