Startups’ shares have a certain value and thus need to be declared by the shareholders in their private tax declaration yearly. Here’s a mini guide of how to communicate the equity’s value to your startup’s investors and employees so that they can correctly declare it to the tax office. All the explanations below are only valid for non-listed companies.
In short, you need to communicate the number of shares your investor or employee holds, together with the corresponding tax value.
How to calculate this tax value? In the case of startups, it is calculated according to a guideline grouping several recognized methods by the Swiss tax authorities. The above guideline is valid in every canton in Switzerland. If you are based in Zurich, there is even a special rule for startups, that allows you to declare your equity’s value at a very low price. Indeed you only need to declare the asset value (Substanzwert), which is simply given by your startup’s net asset (Eigenkapital). This has been established to encourage startups in the canton of Zurich.
One more thing: If your startup is already giving out dividends, don’t forget about the qualified stake rule (qualifizierte Beteiligung) in case the shareholder holds more than 10% of the company's stock (Here are more informations for the canton of Zurich.)
What you should communicate: Number of options granted to the person with value: 0. Declare it alongside the salary statement for employees, in a separate sheet as shown in these examples by the Swiss tax office. Send a holding confirmation to your investors.
Similarly to stock options: Number of phantom stock options granted with value: 0. Declare it alongside the salary statement for employees and send a holding confirmation to your investors.
VIU has stock and phantom stock options for employees. We’re proud that Ledgy helps to make VIU’s process of sending holding confirmations easier. We've asked Peter Kaeser, co-founder and COO at VIU about how he uses Ledgy. Here's what he said: “Instead of the cumbersome process of copy-pasting values from an excel sheet into individual emails, Ledgy provides a ready-to-be-downloaded holding confirmation for all stakeholders.” You can have a look at such a holding confirmation on the Ledgy demo when clicking on download holding confirmation.
Thanks to Monica Maurer from ACT Audit & Tax AG for answering our questions about how to calculate the tax value of startups equity.