Switzerland has to adjust its corporate tax again. On the one hand, it should increase to at least 15 percent in all cantons. Ueli Maurer said that on Friday.
The world’s largest companies are to receive a kind of special taxation. They should not only be taxed in the country of residence. In Switzerland, Novartis are sure to be, …
A new tax regime for companies has been in force in Switzerland for less than two years. It had to be adjusted because it was no longer accepted internationally that corporations pay less taxes in Switzerland. The reform was a difficult undertaking – the first attempt, the Corporate Tax Reform III, even sank the people.
And now Switzerland is facing the next correction – again under international pressure from the Organization for Economic Cooperation and Development (OECD). On the one hand, this is pushing for a global approximation of corporate income tax rates. Internationally active companies should pay at least 15 percent if they generate more than 750 million euros in sales per year.
Many cantons have to raise taxes
Switzerland, Finance Minister Ueli Maurer (70) made it clear on Friday after his return from the meeting of G20 finance ministers in Washington, agreed to this. Even if that means that 18 cantons have to increase their cantonal profit taxes. And Switzerland is losing a competitive advantage that it had until now.
The crux is in the details: According to Maurer, it is conceivable that companies would have to pay less taxes despite higher rates – because it is still unclear on what basis the 15 percent should be levied. This fog should clear at the end of the month.
According to federal estimates, between 200 and 300 Swiss companies and around 2000 to 3000 foreign subsidiaries will be affected by this pillar of the reform.
“A bureaucratic monster”
The second pillar of the OECD reform is even more complicated – and much less ready for debate. This calls for a special taxation of around 100 largest companies in the world. In future, they should not only pay taxes where they are based, but also where they generate sales.
“It’s a bureaucratic monster that we don’t really understand yet,” said Maurer. But here, too, we are confident that implementation is “possible and manageable”.
Certainly three Swiss companies affected
In Switzerland, this change would only affect very few companies. Maurer named the pharmaceutical multinationals Novartis and Roche as well as the food company Nestlé. Depending on the design, one or two large companies could be added.
The situation for Glencore in Baar ZG is likely to be unclear. Commodity mining companies have been excluded from the reform, as have banks – it is not yet clear to what extent commodity traders are affected.
Mason getting more money?
Conversely, Switzerland could also benefit: corporations such as Apple, Amazon, Google and Microsoft would then also have to deduct taxes in this country. How much that would flush into the coffers is completely unclear.
Maurer assumes that parliament will bow over the reform in 2023. Until then, Maurer has to work out a message. No wonder, he said on Friday: “I have no time to declare my resignation”.