Swiss Equity Incentive Reporting

For many Swiss companies, December marks the beginning of the crucial period for preparing end-of-year payroll reporting. Employers who use equity-based compensation to incentivise employees - such as shares, options, or RSUs - must compile the necessary data to prepare an award summary document, commonly referred to as an “equity annex.” This annex complements the Swiss salary certificate and is legally required to be submitted alongside it. Collecting the relevant data and completing these annexes can be complex and time-consuming. To address this challenge, Deloitte offers an automated solution that consolidates payroll data and generates an equity annex fully compliant with Swiss tax regulations across all cantons.

What exactly is an Equity Annex?

Since 1 January 2013, employers are required under the Federal Direct Tax Act to certify equity-based earnings. They must provide the tax authorities with information both for the year in which equity awards are granted and for the year in which a related transaction occurs. This obligation applies even when the equity plan is administered outside Switzerland by a foreign group company.

Employees are responsible for accurately reporting this compensation and must include the equity annex when submitting their individual tax return.

When does it need to be delivered?

The equity annex must be submitted alongside the Swiss salary certificate. In line with Swiss tax filing deadlines, both the salary certificate and the accompanying equity annex should typically be provided to employees by the end of February. This ensures timely tax filing and helps avoid any late interest charges or penalties.

Common equity incentive reporting mistakes

Preparing equity annexes accurately can be challenging, as it demands specialised knowledge of both Swiss and international tax regulations. Payroll teams may struggle to produce high-quality annexes, while reward teams are sometimes unaware of Swiss specific reporting obligations. Common mistakes include :

• Missing annexes: Failure to prepare required annexes (for example, to confirm there were no transactions during the year);
• Missing information: Failure to include all required information in the reporting document;
• Incomplete reporting.

These mistakes can have an impact on the calculation of an employee’s income tax liability and might lead to penalties in addition to the actual amount of taxes to be paid.

Key benefits of our assistance include:

1. A guarantee of high quality, compliant reporting taking into account the very latest tax administration requirements.
2. Relieving the payroll team of the burden of equity reporting.
3.  Knowledgeable experts who respond to questions from the tax administration on your behalf.
4. The option to prepare equity annexes throughout the year, immediately after transactions take place.

Companies are strongly advised to devote the same level of care to preparing Swiss Equity Annexes as they do to the salary certificate itself. Utilising automated reporting solutions not only enhances the accuracy and quality of the annexes but also reduces the time required for their preparation and review.

If you have any questions or would like to discuss this topic further, please feel free to contact our key representatives listed below.

Authors

• David Wigersma - Partner, Global Employer Services
• Muriel Cosendey - Senior Manager, Global Employer Services