Switzerland, together with around 140 other countries, has agreed within the framework of an OECD project that from 1 January 2024 large, internationally active companies with an annual turnover of at least 750 million euros will have to pay at least 15 percent tax on their profits worldwide. If the OECD minimum tax is not implemented in one country, other states can claim the difference from the companies concerned.
On 18 June 2023, the Swiss electorate fortunately clearly approved the implementation of the OECD minimum taxation proposed by the Federal Council and Parliament via a so-called supplementary tax with 78.5%.
The implementation of this international reform in Switzerland is important for the companies concerned, because it brings legal certainty and reduces unnecessary administrative expenses as well as the risk of double taxation. For the Confederation and the cantons, however, the result of the vote means higher tax revenues.
With the Yes vote, the focus in this business is now shifting to:
- the resulting change in international location competition
- the technical implementation at the national level
Change in international location competition
Low profit taxes have always been an important reason why international companies carry out activities with high added value and high profits in Switzerland. Thus, these attractive profit taxes – even if this seems illogical at first glance – led to high tax revenues for the federal government and the cantons. With the international harmonisation of profit tax for large companies, the “tax” factor loses importance in locational competition and Switzerland thus loses an important locational advantage.
If Switzerland is to continue to be economically and financially successful in the future, it is primarily the cantons that must develop new instruments so that international companies continue to want to carry out their most value-intensive and profitable activities in Switzerland, despite the high wages, for example. Only if the cantons adapt to the new rules of location competition can the high revenues from profit tax be maintained and even additional revenues be generated.
For the adjustment to the new location competition, the cantons have in particular the additional revenues from the supplementary tax at their disposal. It must now be decided at the political level how these will be used. For reasons of profitability, it is particularly attractive for Switzerland to develop targeted instruments that focus on the settlement of particularly value-intensive corporate activities such as research, innovation or so-called principle functions. SwissHoldings advocates targeted instruments and firmly rejects extensive subsidies, as is fashionable in the USA or the EU. When choosing new instruments, only internationally permissible measures should be considered for the Swiss economy, which is strongly internationally active.
Swiss implementation ordinance on OECD minimum taxation
At the technical level, a transitional ordinance is being drafted to implement the decision of the Swiss electorate. Excluding international delays, this ordinance is to be applied throughout Switzerland as of 1.1.2024. The ordinance will later be replaced by a federal law as part of the ordinary legislative procedure.
In August 2022, the Federal Council presented the first part of the draft ordinance. This is limited to two areas. In order to rule out differences in the Swiss implementation of the GloBE rules, the ordinance contains a direct reference to the OECD’s Pillar 2 Model Rules (including commentary and administrative guidance). Furthermore, the draft ordinance regulates the distribution of the supplementary tax revenue between the cantons according to the source. The tax revenues from the Swiss supplementary tax are to be allocated to those cantons whose companies/business units have paid the supplementary tax. SwissHoldings had submitted the following statement on the draft ordinance.
On 24 May 2023, the Federal Council presented the second part of the draft ordinance (Draft Ordinance 2). The consultation draft regulates procedural issues (one-stop shop by lead canton, normal mixed assessment procedure incl. tax return, purely digital assessment procedure, appeals, penalty provisions and procedures). The consultation will last until 14 September 2023. SwissHoldings will of course participate in the consultation process. SwissHoldings is particularly critical of the following aspects of the draft:
- Instead of joint and several liability, primary liability of the parent company and subsidiary liability of the remaining Swiss companies (Art. 6).
- Adaptation of the ALBA Ordinance for the use of the CbCR Safe Harbour also by smaller Swiss groups with less than CHF 900 million turnover (Art. 10)
- Optional rights of groups of companies (Art. 20)
- Allocation of the supplementary tax to the individual business units (Art. 22)
- Entry into force of the UTPR – the Federal Council should take this decision at a later date, in accordance with international developments (Art. 39)
Weiterführende Dokumente
3. February 2023
Joint consultation response on compliance and tax certainty aspects of global minimum tax
25. January 2023
SwissHoldings comments on OECD public consultation document: Pillar One – Amount B
16. December 2022
OECD tax millions to stay in Switzerland
14. November 2022
Statement on the Ordinance of the Federal Council on the Minimum Taxation of Large Groups of Companies
26. October 2022
EATC wants 50/50 distribution of the gross profit from the supplementary tax
28. September 2022
Council of States approves OECD minimum taxation bill
26. August 2022
OECD digital taxation project: WAK-S largely follows Federal Council proposal
23. June 2022
OECD Digital Taxation Project: Message published
11. April 2022
SwissHoldings comments on the federal decree on the implementation of the OECD/G20 project on the taxation of the digital economy
11. April 2022
Vernehmlassungsantwort zur Umsetzung des OECD/G20-Projekts zur Besteuerung der digitalen Wirtschaft
4. March 2022
SwissHoldings comments on public consultation document: Pillar One – Amount A: Draft Model Rules for Tax Base Determinations
25. January 2022
2022: Steuerpolitische Weichen richtig stellen
13. January 2022
SwissHoldings begrüsst Umsetzungsplan zum OECD-Digitalbesteuerungsprojekt
6. September 2021
OECD-Digitalbesteuerung – Unternehmen diskutieren mit Verwaltung
16. February 2021
Das OECD-Digitalbesteuerungsprojekt könnte scheitern – mit potentiell negativen Folgen für die Schweiz
16. February 2021
Das OECD-Digitalbesteuerungsprojekt könnte scheitern – mit potentiell negativen Folgen für die Schweiz
2. February 2021
Steuerpolitische Prioritäten nach Corona – Fokus auf Wirtschaftswachstum, Wettbewerbsfähigkeit und Steuereinnahmen
14. December 2020
Public Consultation on Reports on the Pillar One and Pillar Two Blueprints – Joint comments by economiesuisse and SwissHoldings
10. December 2019
OECD/G20-Projekt zur «Besteuerung der digitalisierten Wirtschaft» – neuste Entwicklungen und Anliegen von SwissHoldings
10. December 2019
OECD/G20-Projekt zur «Besteuerung der digitalisierten Wirtschaft» – neuste Entwicklungen und Anliegen von SwissHoldings
2. December 2019
Public Consultation on the Global Anti-Base Erosion Proposal (“GloBE”) under Pillar Two Joint comments by economiesuisse and SwissHoldings
12. November 2019
Public Consultation on the Secretariat Proposal for a „Unified Approach“ under Pillar One – Joint comments by economiesuisse and SwissHoldings
7. November 2019
Globale Umverteilung der Unternehmensgewinne gefährdet Schweizer Erfolgsfaktoren
