Switzerland's attractive tax environment for companies has made a significant contribution to the country's prosperity in recent years. Companies based here create jobs, make investments and provide an important source of tax revenue. Companies with cantonal tax status have accounted for half of the Confederation's profit tax receipts in recent years. International developments, particularly in the OECD, have led to a situation whereby certain provisions of existing Swiss legislation are no longer compatible with international standards. As a result of this diminishing acceptance, companies are confronted with reduced legal and planning certainty. The aim of the latest corporate tax reform is to consolidate international acceptance. This will provide clarity for companies with respect to the key legal parameters. At the same time, the reform includes a substantial package of further measures designed to improve the system of corporate tax legislation. The work undertaken by a joint federal and cantonal project organisation constitutes the basis for the key aspects of the reform. In December 2013, the project organisation prepared a report that set out and evaluated various measures. The proposed measures have generally been welcomed by the cantons.
As part of the ongoing review of all tax regimes of OECD member states, several Swiss tax regimes, including those criticised by the EU, were classified as problematic, primarily due to the different taxation of domestic and foreign company profits. The review also includes the preferential taxation of royalties, or "IP boxes" (also known as patent boxes or royalty boxes), which are a feature of various European countries.
In parallel to this, Switzerland is pursuing discussions with the EU in a bid to reach a balanced understanding on business taxation issues within the next few months and thereby conclude the corresponding dialogue, which dates back to 2012.
The Federal Department of Finance will prepare a consultation draft on the basis of the project organisation's report and the comments on it submitted by the cantons. It is planned that the consultation will be initiated by September 2014. International developments that occur in the meantime are to be taken into account as work progresses.
Address for enquiries:Fabian Baumer, Vice-Director, Head of Tax Policy, Federal Tax Administration FTA
tel. +41 31 325 31 67, email@example.com
The Federal Council Internet: http://www.admin.ch/br/index.html?lang=en
Federal Department of Finance Internet: http://www.efd.admin.ch