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10 Facts about Swiss Tenancy law, Social security contributions and taxes during COVID-19

April 8, 2020

A. Tenancy law
1. Whether you have a commercial lease or a residential lease, in accordance with the decision of the Swiss federal government , the Landlords have to grant you a grace period of 90 days for the payment of rents due between the 13thMarch 2020 and the 31st May 2020, if your delay is caused by the measures taken by the Federal Council to fight the coronavirus.


2. Please note that the grace period is not interest free and that the Landlords are entitled to charge a 5% late interest on the rents not paid.


3. If the rent is not paid within the 90 days grace period, the landlord is entitled to terminate the lease with a 30 days notice period which begins running from the beginning of the following month after which it was given.


4. The Geneva Government decided to suspend the forced evacuations of tenants and subtenants (for commercial and private lease agreements) from 25 March 2020 and until 31 May 2020. This suspension is subject to a possible extension depending on the evolution of the COVID-19 crisis .


5. On 6 April 2020, the real estate sectors and the State of Geneva signed an agreement to exempt small companies and self-employed persons, affected by the measures taken by the Federal government to combat the spread of the coronavirus, from paying their current commercial rent for the month of April 2020.

This emergency aid covers commercial rents not exceeding CHF 3,500 per month, excluding charges. This aid can be requested be filing in and sending the following form: here

The advantage granted to the landlords by the Estate of Geneva is that if they waive a part or all of the rent of the month of April 2020, the state of Geneva will reimburse the landlords half of the amount which the landlords have waived, but not exceeding 50% of the rent in case of a 100% concession. The payment will be made within 30-days of the landlord’s invoice.


6. For lease agreements of other Cantons, although there is no formal decision of the courts for these issues for the time being, it seems improbable that the courts will accept the clause of force majeure to waive the obligation of the tenants to pay rent even though they have to stop business. The legal reasoning behind this is that the use of the shop is not forbidden but the business is. If this continues long term, then the tenants may have a right to terminate their lease before its term, but this will depend on whether the current measures will be prolonged.


B. Social security contributions
7. The Federal government has decided that no late interest will be charged on social security contributions due for the period from 23rd March 2020 and during a 6 month-period.


C. Taxes
8. The Geneva tax authorities have waived the late interest due for late tax returns filed normally by 31st march 2020 – until 30th June 2020.

9. From the 20th March till 31st December 2020, no interest will be due on late payment of federal taxes (VAT and other special consumer taxes),cantonal and communal taxes and customs duties pertaining to these periods.

10. For Federal direct taxes, there will be no interest due on late payments of taxes pertaining to the period between 1st March 2020 and 31st December 2020.


D. Conclusions
Based on the above, in view of the numerous concessions made by the Federal and Cantonal governments, it is important for SMEs or independent entrepreneurs to be aware of the advantages which they can obtain in the current economic situation.
It is advantageous to request prolongations of payment deadlines from the Cantonal or Federal intuitions (e.g. payments of social security and taxes mentioned above).
If you have already paid the rent of the month of April but could benefit from the agreement mentioned above, you should not hesitate to negotiate with your landlord to benefit from a partial or total exemption of your rent.


If you need more assistance, we remain available by email or WhatsApp video conferences to assist you with your legal issues during these uncertain times.

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