Board of Directors

Remuneration of the Board of Directors

Board of Directors' remunerations (e.g. bonuses, attendance fees, fixed remunerations, monetary benefits from employee shareholdings) are taxed at source together with any salary payment in accordance with Article 83 DBG, as long as the entitled member of the Board of Directors or management is resident in Switzerland.

If members of the Board of Directors are resident abroad, the withholding tax on the compensation of the Board of Directors must be applied in accordance with Article 93 DBG. It should be noted that compensation paid to board members resident abroad may be taxable at source in accordance with both Article 91 DBG (salary income) and Article 93 DBG (compensation paid to board members). The tax liability in accordance with Article 91 DBG applies if the compensation is paid for operational activities (e.g. management tasks). Only remuneration for supervisory functions is subject to withholding tax according to Article 93 DBG. If a person subject to withholding tax is simultaneously liable for withholding tax in accordance with Article 91 DBG (salary) and Article 93 DBG (compensation of the Board of Directors), this does not result in a correction of the rate-determining income for salary income.

Examples:

1. Member of the Board of Directors R. is resident in Switzerland and in March receives a gross salary of CHF 10‘000.00 in addition to the remuneration of CHF 5‘000.00. The total income (= CHF 15‘000.00) is therefore subject to withholding tax (ordinary tariff codes) in accordance with Article 83 DBG.

2. Same situation as before with the difference that the member of the Board of Directors is resident abroad. As a result, the gross salary is subject to withholding tax in accordance with Article 91 DBG (ordinary, progressive rate code) and the board member's fee separately in accordance with Article 93 DBG (linear rate).