Moving a Swiss trading company to the Netherlands is usually presented as a single decision. It is not. There are two departures, they are governed by different statutes, and they can be taken separately. Understanding which of them a group is actually taking is the whole of the analysis, because one of them triggers a charge that the other does not.
The first departure is corporate. The company subjects itself to Dutch law and ceases to be a Swiss company. The second is fiscal. The company stops being subject to Swiss tax by personal attachment. A group can take the second without the first, by moving where the company is run while leaving its statutory seat in Switzerland. The tax consequences of the two are not the same.
The corporate step, and the creditors who come first
Article 163 of the Bundesgesetz über das Internationale Privatrecht allows a Swiss company to subject itself to foreign law without liquidation and re-incorporation, on two conditions. The requirements of Swiss law must be satisfied, and the company must continue to exist under the foreign law it is moving to.
The second paragraph is the one that sets the timetable. Creditors must be publicly invited to file their claims, with notice of the impending change of the company’s governing law, and article 46 of the Fusionsgesetz applies by analogy. That is a published call with a period attached to it, and it happens before the change takes effect rather than after.
For a trading company this is more than procedure. Suppliers with retention of title, banks with covenants and counterparties with Swiss-law contracts all have to be dealt with in the same window, and a creditor who objects can hold the timetable. The Dutch side of the operation is comparatively simple. The Swiss side is where the calendar is set.
What Switzerland charges on the way out
Article 54 of the Bundesgesetz über die direkte Bundessteuer provides that the tax liability of a legal person ends with the completion of liquidation, with the transfer of its seat or its effective administration abroad, or with the disappearance of assets taxable in Switzerland. The second and third of those are the routes a relocation takes.
Article 61b then states the consequence. Where tax liability ends, the hidden reserves existing at that moment that have not been taxed, including self-created goodwill, are taxed. The provision defines the end of tax liability broadly: the transfer of assets, businesses, parts of businesses or functions from Switzerland to a foreign business or permanent establishment, the transition to an exemption under article 56, and the transfer of the seat or the effective administration abroad.
Two points follow that groups consistently underestimate. The charge is not limited to assets on the balance sheet, because self-created goodwill is expressly included, and for a trading company with customer relationships and supplier terms that is often the largest single item. And the charge is triggered by moving functions, not only by moving the company, so a partial relocation of the commercial team can produce a partial charge without any change of seat at all.
The thirty-five per cent that depends on which seat moves
The second Swiss charge sits in a different statute and is easy to overlook. Article 4, paragraph 2, of the Bundesgesetz über die Verrechnungssteuer provides that the transfer abroad of the seat of a public limited company, a limited liability company or a cooperative is treated for tax purposes as the liquidation of that company.
That is not a metaphor. It brings the transaction within the withholding tax, which article 13, paragraph 1, letter a, levies at 35 per cent of the taxable benefit on capital income. The tax is withheld and remitted, and the shareholder then has to recover it. Article 32 provides that the right to a refund lapses if the claim is not made within three years of the end of the calendar year in which the taxable benefit fell due, and it provides no discretion.
The word to notice in article 4, paragraph 2, is Sitz. The provision is expressed in terms of the transfer of the seat, not the transfer of the effective administration. Article 54 of the direct federal tax act, by contrast, treats both as ending the profit tax liability. A group that moves only the place of management therefore has to answer the article 61b question but is on a different footing under the withholding tax act. That distinction is worth putting to Swiss counsel in writing before either step is taken.
Who is personally on the hook
Article 55 of the direct federal tax act attaches personal liability to the departure. Where the tax liability of a legal person ends, the persons entrusted with its administration and with its liquidation are jointly and severally liable for the taxes it owes, up to the amount of the liquidation result or, where the company transfers its seat or effective administration abroad, up to the amount of the company’s net assets.
The escape is narrow. Liability falls away where the person liable proves that he applied all the care required in the circumstances. That is a standard measured against what a careful director would have done, and it is met by evidence rather than by intention.
In practice this means the Swiss directors have an interest in the tax position of the migration that is separate from the shareholders’ interest, and often stronger. They are the ones exposed up to the net assets. A board that signs off a relocation without a Swiss ruling or a documented computation is signing off its own exposure, and it is entitled to say so.
The final accounts, and what they have to show
Article 79, paragraph 3, requires a set of accounts with a balance sheet and profit and loss account in every calendar year except the year of formation, and additionally on the transfer of the seat, the administration, a business or a permanent establishment, and on the completion of liquidation. The relocation therefore has a statutory closing date and a statutory closing balance sheet.
That document does a great deal of work. It fixes the moment at which article 61b measures the untaxed hidden reserves, it establishes the values that the Dutch opening position has to be reconciled against, and it is the record the Swiss authority will use if the computation is later questioned. Preparing it as an afterthought is the most common and most expensive error in this operation.
It is also the point at which the valuation question has to be settled rather than deferred. Self-created goodwill in a trading business is not read off a ledger. It is established by a valuation prepared at the time, on a method that can be defended, and the absence of one does not mean the charge is nil.
What arrives in the Netherlands
On arrival the company enters the Dutch charge and pays corporate income tax at 19 per cent on the first 200,000 euro of taxable profit and 25.8 per cent above it. Distributions out of it bear Dutch dividend withholding tax at 15 per cent under article 5 of the Wet op de dividendbelasting 1965, subject to the exemptions and treaties that apply to the shareholder.
What does not arrive is the Swiss tax history. Swiss loss carryforwards, Swiss rulings and Swiss reserve positions are attributes of a liability that has ended. The company starts its Dutch life with an opening position that has to be constructed, and the Swiss exit charge under article 61b is the reason the opening values should reflect market value rather than historic book cost. The Dutch answer to that is not a dedicated entry provision, because there is none. Article 8, first paragraph, of the Wet op de vennootschapsbelasting 1969 determines profit on the footing of articles 3.8 and 3.21 to 3.30 of the Wet inkomstenbelasting 2001, so the total profit principle and sound business practice govern the opening balance sheet. The Act legislates the departure and says nothing about the arrival. The consequence is practical rather than theoretical: the opening values are a position the company takes and has to defend, supported by the Swiss closing balance sheet and the valuation behind the article 61b computation, and not a figure that any Dutch provision hands it.
Article 2, paragraph 5, of the Wet op de vennootschapsbelasting 1969 is relevant in the opposite direction and is worth noting now. A body incorporated under Dutch law is always deemed to be established in the Netherlands for most purposes of that act. A group that completes the corporate migration and becomes a Dutch BV therefore acquires a residence attribute that a later change of management will not undo, and articles 15c and 15d, which deem a deemed disposal at market value when Dutch residence ends, describe what leaving again would cost.
Seat, management, or both
The choice between moving the seat and moving only the management is not a matter of preference. It changes which statutes apply and what the operation costs.
Moving the effective administration alone ends the Swiss profit tax liability under article 54 and brings article 61b into play, while leaving the company Swiss for corporate law purposes. It keeps the Swiss register entry, the Swiss auditor and the Swiss filing obligations, and it leaves the company exposed to being treated as Swiss again if the management drifts back. Moving the seat under article 163 of the private international law act closes the Swiss chapter properly, at the price of the creditor procedure and of the withholding tax treatment in article 4, paragraph 2, of the withholding tax act.
For most trading companies the honest answer is that a half-move is the worst of both. It incurs the exit charge without producing a clean structure, and it leaves two authorities with a plausible claim to the same profits. If the commercial reason for being in the Netherlands is real, the corporate step is usually worth taking. If it is not, the question worth asking is why the company is moving at all, because the Swiss charge falls due either way.
The sequence that works is the same one every time. Fix the closing date. Value the hidden reserves and the goodwill before the board resolves anything. Settle the withholding tax position with Swiss counsel in writing. Run the creditor call. Then, and only then, open the Dutch file.