Global consultant Watson Wyatt is reminding Swiss pension funds to secure necessary administrative systems ready for new legislation next month.
From 1 July all Swiss pensions funds will be subject to stamp duty on stock market transactions. Pension funds with assets of at least CHF10m (EUR6.6m) will be treated as security dealers under the controversial new ruling, meaning that they must register with the tax authorities and fulfil certain administrative requirements. Watson Wyatt notes that pension funds are ultimately responsible for compliance.
Pension funds that currently use a Swiss domiciled manager are already subject to stamp duty on both Swiss and foreign asset transactions, and so will be unaffected financially by the new law.
In-house funds or those using external money managers face additional costs. According to Watson Wyatt, one alternative for reducing the effect of stamp duty is to use Swiss or foreign collective vehicles which are exempt from duty.
The firm adds that compliance with the new registration and administrative procedures will need to be ensured, including the quarterly settlement.
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