Decision on the Contribution Obligation for Employee Stock Discounts

Facts

IBM Switzerland, a subsidiary of IBM World Trade Corporation, enabled its employees to acquire IBM shares at a 15% discounted price. The compensation fund (Ausgleichskasse) obligated IBM Switzerland to pay the parity-based social insurance contributions on the granted net discounts of around 4 million Swiss francs. IBM Switzerland filed a complaint against this order, as it believed that these were not employee shares within the meaning of Art. 7 lit. c OASIO. The AHV Appeals Commission of the Canton of Zurich dismissed the complaint.

Considerations

The Federal Insurance Court dismissed the administrative court appeal of IBM Switzerland. While formally the IBM Corporation and not IBM Switzerland was the employer of the employees, the decisive factor was the economic circumstances. Since the IBM Corporation granted all employees of the IBM national companies the opportunity to participate in its stock purchase plan at preferential conditions, these discounts were to be qualified as a component of the salary. As the employer, IBM Switzerland therefore had to bear the resulting contribution-related consequences, regardless of who was charged for it internally.

The court also did…