- Interim Report 2023
- Letter to Shareholders
- Interim consolidated statement of profit or loss
- Interim consolidated statement of profit or loss and other comprehensive income
- Interim consolidated balance sheet
- Interim Consolidated statement of cash flows
- Interim Consolidated statement of changes in equity
- Notes to the consolidated financial statements
- 1 Reporting entity
- 2 Basis of preparation and significant accounting policies
- 3 Revenue from contracts with customers
- 4 Segment information
- 5 Operating expenses by nature
- 6 Income taxes
- 7 Inventories
- 8 Property, plant and equipment and government grants
- 9 Shareholders’ equity and employee participation plans
- 10 Principal exchange rates
- 11 Financial instruments and fair value disclosures
- 12 Subsequent events
- Global
6 INCOME TAXES
6.1 SWISS TAX REFORM
On May 19, 2019, the Swiss electorate passed the Federal Act on Tax Reform and AHV Financing (TRAF). The tax reform abolishes the tax regimes for holding, domiciliary and mixed companies as of January 1, 2020, and introduces new tax calculation principles. As part of the TRAF and cantonal tax practice, transitional measures were introduced to ease the transition from the current reliefs to the new tax calculation principles. For the Group, these measures allow amongst others the tax-effective amortization of a step-up amount over a period of up to 10 years. Therefore, the Group started to capitalize corresponding deferred tax assets in 2019.
Deferred tax assets capitalized in connection with the step-up amount:
| 2022 | 2023 |
CHF 1,000 |
|
|
Balance at January 1 | 8,755 | 14,292 |
Write-off deferred tax asset for corresponding tax benefits received in current period | (312) | (281) |
Recognition of deferred tax assets for tax benefits in future periods (non-recurring) | 1,866 | 4,696 |
|
|
|
Balance at June 30 | 10,309 | 18,707 |
The calculation of the deferred tax assets related to the Swiss tax reform required management to make significant estimates and assumptions. The outcome is still uncertain and might lead to adjustments in future years.
6.2 OECD’S BASE EROSION AND PROIFT SHIFTING (BEPS) – PILLAR TWO
In 2019, the OECD started a two-pillar approach to address the 'Tax Challenges of the Digital Economy' resulting from the 2015 Base Erosion and Profit Shifting (BEPS) project. A stated goal of the Pillar One proposal is to allocate a greater share of residual profits to market/user jurisdictions. Pillar Two suggests the implementation of the proposed 15% global minimum tax.
The Group will be in scope of Pillar Two. The OECD is continuously publishing model legislation. Late in 2022, the EU issued a directive related to the global minimum tax to be considered by member countries in 2023 and to be effective in 2024. On June 18, 2023, the Swiss electorate decided to implement Pillar Two as of January 1, 2024. Recently Japan and UK enacted or substantially enacted regulations with respect to Pillar Two.
The Group will be affected by the new global minimum tax rate, however, at the date the financial statements were authorized for issue, only Japan and UK, in which the Group operates, have enacted, or substantively enacted the tax legislation related to Pillar Two. The remaining jurisdictions in which the Group operates have not yet enacted, or substantially enacted Pillar Two regulations. Therefore, it is too early to assess the overall impact of these potential changes, as the tax laws and related regulations need to be enacted and implemented. As a result, the income tax charge and cash flows could be impacted by the Pillar Two regulations.
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