May 2021 / Switzerland

May 1 2021

New Investment Record for the Biotech Industry

The Swiss biotech industry achieved great things again in 2020. For the tenth year in succession, it secured top spot in the Global Innovation Index. Moreover, the latest Swiss Biotech Report shows that capital investment in Swiss biotech firms increased almost threefold versus 2019. A review of the Swiss biotech sector for 2020 shows that the industry could hardly be in better shape. As the Swiss Biotech Report 2021 entitled “Agility, leadership and innovation in the time of COVID-19” reveals, the industry achieved top scores for nearly every category. Swiss biotech firms made valuable contributions to combatting the COVID-19 pandemic, an accompanying press release issued by the Swiss Biotech Association states. In this context, the report underlines Switzerland's role in basic research, vaccine production and component delivery, as well as in therapeutics.

Biotech creates jobs

Research carried out by the country’s biotech firms led to an 8 percent increase in jobs. At present, these companies employ 16,300 people. Moreover, they were involved in a series of mergers and acquisitions. The Swiss biotech industry generated sales of 4.5 billion Swiss francs in 2020, slightly down on the 4.8 billion Swiss francs recorded in the prior year. This sales decline can above all be attributed to advantageous non-recurring events in 2019. Nevertheless, biotech firms continued to increase their revenues from marketed products and services.

Top spot for innovation

In the Global Innovation Index, Switzerland claimed top spot in 2020 for the tenth year in a row. Capital investment in Swiss biotech companies hit a record level: In comparison with the previous year, this nearly tripled to stand at 3.4 billion Swiss francs. Investment in research and development alone rose by 10 percent to 2.2 billion Swiss francs. “While the pandemic highlighted the importance of the biotech and pharmaceutical sectors, a note of caution may be warranted as many companies suffered significant delays in their R&D pipeline”, warns Michael Altorfer, CEO Swiss Biotech Association, in the press release. He adds: “Nonetheless, we are confident that the sector will continue its impressive expansion”. The Swiss Biotech Report is jointly produced by ten Swiss companies and organizations.   Source: Switzerland Global Enterprise
May 26 2021

Switzerland and United States Sign Competent Authority Arrangement on Dividends Withholding Exemption for Pensions Under Tax Treaty

According to an update of 20 May 2021, published by the Swiss Federal Tax Administration, Switzerland and the United States have signed a competent authority arrangement (2021) regarding certain American and Swiss pensions or other retirement arrangements, including individual retirement savings plans, that may be eligible for benefits under paragraph 3 of article 10 (Dividends) of the Switzerland - United States Income Tax Treaty (1996), as amended by the 2009 protocol. The arrangement was signed by Switzerland on 16 April 2021 and by the United States on 6 May 2021.

The mutual arrangement is entered into under paragraph 3 of article 25 (Mutual Agreement Procedure) of the treaty and supersedes the competent authority arrangement of 10 December 2004, I.R.B. 2004-146. It is effective for dividends paid on or after 1 January 2020.