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Switzerland

2. State Aid

Government subsidies and special relief resources allocated to support employers, and workers, in their efforts to maintain employment and pull through the crisis.

The following government subsidies and special relief resources have been put in place in Switzerland to support employers and workers in their efforts to maintain employment and pull through the crisis:

  • Financial Support For Companies

Emergency Aid by Means of Guaranteed COVID Bridging Loans – With bridging loans (COVID-19 loans), affected companies are supported as unbureaucratically, specifically and quickly as possible. Applications for loans can be submitted until 31 July 2020. Loans of up to CHF 500,000 are disbursed within a short period of time and are 100% secured by the Confederation. The interest rate on these bridging loans is currently 0%. Bridging loans exceeding the amount of CHF 500,000 are 85% secured by the Confederation. The lending bank contributes 15% of the loan. Such loans can amount to up to CHF 20 million (including CHF 500,000 from COVID-19 loans) per company and therefore require a more comprehensive bank audit. For these loans, the interest rate is currently 0.5% on the loan secured by the Confederation.

Deferment of Payment of Social Security Contributions – Companies affected by the crisis are granted a temporary, interest-free deferral for the payment of social security contributions.

Liquidity Buffer in the Tax Area – Businesses have the possibility to extend payment periods without having to pay interest on arrears. For this reason, the interest rate for value added tax, customs duties, special excise taxes and incentive taxes is waived during the period from 21 March 2020 to 31 December 2020. The same regulation applies to direct federal taxes from 1 March 2020 until 31 December 2020.

Measures in the Area of Occupational Pension Schemes – The Federal Council has also decided that employers may temporarily use the employer contribution reserves they have built up to pay employee contributions to the occupational pension scheme. This measure should make it easier for employers to bridge liquidity shortages. The measure has no effect on employees; as under normal circumstances, the employer deducts their contribution share from their wages and the entire contributions are credited to them by the pension fund.

  • Short-Time Work

A company may temporarily reduce the working hours of its employees or cease operations completely if the company gets into financial difficulties, without fault. Employees affected by short-time work receive compensation from the unemployment insurance, amounting to 80% of the wage loss. The maximum annual salary insured, amounts to CHF 148,200 per year.

Due to the coronavirus pandemic, the application process for short time work has been simplified and the range of beneficiaries widened. Some short-time work emergency measures have already been lifted and others will end on 31 August 2020. However, companies will continue to apply for short-time work to safeguard jobs that are at risk due to the COVID-19 crisis.

  • Compensation for Loss of Earnings for Self-Employed Persons

Self-employed persons who suffer loss of earnings due to official measures to combat COVID-19 are compensated in the following cases: i) medically prescribed quarantine; and ii) forced business closure. The compensation corresponds to 80% of the income and amounts to a maximum of CHF 196 per day.

Any questions

Ask our member firm lelex Attorneys at Law in Switzerland