Have the profit appropriation decided
In a company limited by shares (AG), a limited liability company (GmbH) or a cooperative, it is the owners, gathered in a meeting, who decide what becomes of the profit: the reserve the law requires, any voluntary reserves, a dividend, the amount carried forward to next year. To Bill calculates what the law requires, prepares the proposal to sign, then books the decision. Your fiduciary follows the same decision from their cockpit: see Profit appropriation and withholding tax.
Before you start
- The financial year is closed. See Close the financial year.
- Your books are full books, and the company is an AG, a GmbH or a cooperative. In a sole proprietorship, the profit belongs to you; in a partnership, it goes to the partners under the partnership agreement: there is nothing to decide here.
- You need the right to manage the books to save and book.
- Have your articles of association to hand: they may require a higher reserve than the law.
Prepare the proposal
Open Accounting › Profit appropriation. To Bill opens the last closed financial year, marked to decide.
The company. Check the Legal form, taken from the notes. Turn on Holding company if its main activity is holding participations.
The result to share. To Bill shows the profit for the year, the profit or loss of previous years, and the Profit to share.
What the law requires. To Bill calculates the Legal reserve and explains how. If your articles require more, enter it in On top, if your articles require it.
Your proposal. Put an amount aside in voluntary reserves if you wish, then enter the Dividend (gross amount). To Bill shows the Withholding tax of 35%, to pay to the FTA (1) and the net amount paid to the members or shareholders.
The meeting. Enter the Date of the meeting and, if it is different, the Dividend payment date.
Click Save the proposal.
The legal reserve
For an AG and a GmbH, 5% of the profit for the year goes to the statutory retained earnings, until the statutory reserves reach half of the capital entered in the commercial register (20% for a holding company). A loss from previous years is first offset against the profit. For a cooperative that distributes its profit, at least one twentieth goes to the reserve.
The dividend and withholding tax
Always enter the gross dividend. Withholding tax of 35% is deducted from this amount and paid to the Swiss Federal Tax Administration (FTA); the members or shareholders receive the rest. A dividend can only be paid out of the balance sheet profit and the reserves created for that purpose, after the legal reserve: Distribute the maximum suggests the highest possible amount.
A Swiss company holding at least 10%
A Swiss company that directly holds at least 10% of the capital can receive its dividend without deduction, with FTA form 106. Open Is one of the … a Swiss company holding at least 10%? and enter the Part paid without deduction.
The summary and the document
On the right, Summary recaps the allocation and the amount Carried forward to next year, then what has to be done with the FTA after the meeting.
- Proposal (PDF) creates the proposal to submit to the meeting, in French, German, Italian or English, with the signature lines. It goes with the annual accounts.
- Points in red, for example a dividend that is too high, prevent booking. A point in orange, such as a meeting held after the six-month deadline, is a warning.
Book the decision
Once the meeting has been held, click Book the decision (1). To Bill recalls the amounts and the entry date; confirm with Book.
To Bill posts an entry on the date of the meeting, in the current financial year. It allocates the result between the legal reserve, the voluntary reserves, the net dividend to pay, the withholding tax due and the amount carried forward. The PDF of the decision is attached to it as supporting voucher.
A decision that has been booked
To change it, click Cancel the decision… and give the reason: an opposite entry is posted, nothing is deleted, and the proposal can be edited again. The closed financial year, however, can no longer be reopened.
After the meeting: pay and declare
The page now shows Decided by the general meeting of … (for a GmbH, Decided by the members’ meeting of …) with the date, and what remains to be done.
- Payments. Pay the net dividend to the members and the withholding tax to the FTA from your bank. When the transfers appear on your statement, assign them to the “Declared dividends” and “Anticipatory tax payable” accounts: the amount left to pay updates.
- Withholding tax. Declare it on the form for your legal form, with the signed annual accounts, within 30 days. File online with the FTA opens the FTA’s page. Once you have filed, click It is filed (1).
- The document. Resolution (PDF) creates the resolution, ready to be signed by the chair of the meeting and the person who keeps the minutes.
| Legal form | FTA form |
|---|---|
| AG | Form 103, also online on the FTA Portal |
| GmbH | Form 110, also online on the FTA Portal |
| Cooperative | Form 7 |
Even without a dividend
A company whose balance sheet total exceeds CHF 5 million sends its accounts and the form to the FTA every year within 30 days of their approval, even without a dividend. To Bill reminds you of this. Other cases the books cannot see also require it, for example a dividend that fell due during the financial year: Summary mentions them.
Situation & to-do reminds you of the decision to have taken, then of the withholding tax declaration to file.
Legal basis
- The general meeting approves the annual accounts and decides on the appropriation of the balance sheet profit, in particular the dividend: Art. 698 para. 2 no. 4 CO (AG), Art. 804 para. 2 no. 5 CO (GmbH) and Art. 879 para. 2 no. 2bis CO (cooperative). The ordinary meeting takes place within six months of the end of the financial year: Art. 699 para. 2 and 805 para. 2 CO.
- 5% of the profit goes to the statutory retained earnings, after a loss carried forward has been offset, until it reaches half of the share capital together with the statutory capital reserve (20% for a holding company): Art. 672 CO; applicable to the GmbH: Art. 801 CO. Cooperative: Art. 860 CO.
- Dividends may only be paid out of the balance sheet profit and the reserves created for that purpose, after the allocations to reserves: Art. 675 para. 2 and 3 CO. The order in which losses are offset: Art. 674 CO.
- Withholding tax is 35%: Art. 13 para. 1 let. a VStG, the Federal Act on Withholding Tax (German version: fedlex has no English one). It falls due thirty days after the tax claim arises: Art. 16 para. 1 let. c VStG.
- Within 30 days of the approval of the accounts, an AG or a GmbH sends the FTA the signed annual accounts and the statement on the official form, and pays the tax on the income that has fallen due, in particular if the balance sheet exceeds CHF 5 million or if the profit appropriation decision results in a taxable payment: Art. 21 VStV, the Withholding Tax Ordinance (German version: fedlex has no English one); cooperatives: Art. 23 para. 2 VStV. Holdings of at least 10%: Art. 26a VStV. The forms: FTA, forms to declare or report withholding tax and declaring withholding tax online.