Appropriation of profit and dividend
As at: · fastview ag, Suhr
Professionally responsible: Marco Zanetti and Reto Ackermann, fiduciaries and auditors, fastview ag
The general meeting decides on the appropriation of the balance sheet profit on the proposal of the board of directors. This page summarises the rules on reserves, dividend and withholding tax concisely and shows how nunia links proposal, resolution and dividend certificate.
The rules in brief
The balance sheet profit consists of the result for the year and the profit or loss carried forward from the prior year. In an AG the general meeting decides on its appropriation (Art. 698 CO), in a GmbH the general meeting of members.
- Statutory retained earnings: under Art. 672 CO, a loss carried forward must first be eliminated; thereafter 5 % of the annual profit is allocated to the statutory retained earnings until the statutory capital reserve and retained earnings together reach half of the share capital. For holding companies the limit is 20 %.
- Dividend: dividends may only be paid out of the balance sheet profit and out of reserves formed for this purpose (Art. 675 CO). Interim dividends from the profit of the current financial year are permitted under the conditions of Art. 675a CO, including interim financial statements.
- Withholding tax: the company owes 35 % withholding tax on dividends. Declaration and payment take place within 30 days of the dividend becoming due.
- Carry-forward: whatever is not allocated or distributed is carried forward to the new account.
Proposal on the appropriation of the balance sheet profit
In nunia the appropriation of profit is a step of the financial statements. nunia shows the annual profit and profit carried forward with a prior-year column and checks the lines against the balance sheet: if the recorded profit carried forward differs from the value in the balance sheet or from the prior year’s carry-forward, a note appears with the difference and a button to align it.
For the statutory retained earnings, nunia calculates the minimum allocation under Art. 672 CO: 5 % of the annual profit after elimination of a loss carried forward, limited to 50 % of the capital, 20 % for holding companies. nunia recognises a holding company by its purpose or company name; the classification can be overridden. If the allocation is missing from the proposal, nunia points this out with the calculated amount.
Resolution in the GM minutes
In the GM minutes the agenda item “Appropriation of the balance sheet profit” is ready. nunia pre-fills the table from the appropriation of profit in the financial statements: annual profit, profit carried forward, balance sheet profit, allocations to the statutory and voluntary retained earnings, dividend (per share if desired) and carry-forward to the new account.
Dividend, withholding tax and certificate
Under “Dividend & certificate” nunia takes over the gross dividend from the GM resolution and distributes it among the shareholders according to the share register, by number and nominal value. For each person nunia calculates gross, withholding tax and net, rounded to the centime; several share tranches of one person appear on one certificate. As a rough plausibility check, nunia verifies that the balance sheet profit covers the dividend.
From the due date nunia calculates the 30-day deadline; if the engagement includes the year-end closing, it appears in the engagement’s deadlines. nunia pre-fills the official FTA form as a Snapform file: Form 103 for the AG, Form 110 for the GmbH and cooperative, plus Form 106 per domestic group recipient. If a legal entity holds at least 10 %, nunia mentions the notification procedure. You check the file in the Snapform Viewer and submit it via the FTA ePortal or on paper. The complete package as PDF contains the dividend certificates as a letter per shareholder, for foreign group recipients the notification 108 with Form 823, and for an extraordinary benefit the declaration 102; these PDFs are working aids, not official forms.
What nunia takes care of
- Present the balance sheet profit with prior year and reconcile it with the balance sheet
- Calculate the minimum allocation to the statutory retained earnings under Art. 672 CO
- Take over the appropriation of profit into the GM minutes
- Distribute the dividend according to the share register, calculate 35 % withholding tax and net
- 30-day deadline, FTA form as Snapform file and certificates
What you decide
- amount of the dividend and of the voluntary reserves
- whether the distributable equity is sufficient (see capital analysis)
- whether an interim dividend or a distribution from capital contribution reserves is an option
- declaration and submission to the FTA
This page summarises the legal situation in simplified form and does not replace advice in the individual case. The law, the articles of association and current practice are authoritative.
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Frequently asked questions
How high is the allocation to the statutory retained earnings?
Under Art. 672 CO, 5 % of the annual profit after a loss carried forward has been eliminated, until the statutory capital reserve and retained earnings together reach 50 % of the share capital, 20 % for holding companies. nunia calculates this minimum amount and points it out if it is missing from the proposal.
What may a dividend be paid out of?
Only out of the balance sheet profit and out of reserves formed for this purpose (Art. 675 CO). As a rough plausibility check, nunia verifies that the balance sheet profit covers the dividend; the formal check of distributable equity remains with the fiduciary.
Does nunia calculate the withholding tax?
Yes. For each shareholder nunia calculates gross, 35 % withholding tax and net, plus the 30-day deadline from the due date. nunia pre-fills the official FTA form (103 for the AG, 110 for the GmbH, 106 per domestic group recipient) as a Snapform file; you check it in the Snapform Viewer and submit it via the FTA ePortal or on paper.
Does nunia create dividend certificates?
Yes, as a letter per shareholder. nunia combines several share tranches of one person on one certificate.
Does nunia support distributions from capital contribution reserves?
There is no separate calculation for this in nunia. You record extraordinary distributions as a separate type with the form intended for it; the tax assessment is up to you.
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