Switzerland: Corporate tax reform as per draft legislation would make Switzerland more attractive for multinationals
International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX
Copyright © Legal Benchmarking Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Switzerland: Corporate tax reform as per draft legislation would make Switzerland more attractive for multinationals

kistler.jpg

zulauf.jpg

Jacques Kistler


René Zulauf

The draft legislation in regard to the so-called Corporate Tax Reform III was published on September 22 2014 and it turned out be more attractive than generally expected. If the reform – which brings along a replacement of all special tax regimes by other measures presumably by 2019 – will be implemented according to the draft legislation, Switzerland will become more attractive for multinationals. The position of Switzerland as a holding, financing and intellectual property (IP) location will be strengthened. Switzerland will have one of the most liberal participation exemption regimes, with no minimum thresholds, no minimum holding period and no controlled foreign companies (CFC) or subject-to-tax rules. Financing activities in particular will benefit from a notional interest deduction (NID) on equity. Income related to patents will be able to benefit from a very liberal patent box regime.

In addition, to attract new companies, a step-up will be granted upon immigration of a company to Switzerland which would enable the company to pay very little tax during the first 10 years.

Above all, the reform will bring long-term planning security, a step-up for tax purposes that can be amortised tax effectively over 10 years once the reform is implemented in 2019 or 2020 will ensure that companies, which are transitioning out of a tax privileged regime, such as a mixed company regime, can keep their existing tax rate for up to 15 years.

The draft legislation is now in the consultation process where interested parties can suggest changes to the legislation. The clear intention of this reform is not only to make Switzerland more attractive for multinationals, but also to ensure that the proposed tax regimes and measures are BEPS-proof and in line with EU regulations.

Jacques Kistler (jkistler@deloitte.ch) and René Zulauf (rzulauf@deloitte.ch)

Deloitte

Tel: +41 58 279 8164 and +41 58 279 6359

Website: www.deloitte.ch

more across site & bottom lb ros

More from across our site

There will always be multinationals trying to minimise tax by pushing the boundaries of their cross-border arrangements, Rob Heferen claimed
HMRC’s attempts to crack down on fraudulent tax relief claims are well-meaning, but the agency risks penalising genuinely innovative businesses, writes Katy Long of ForrestBrown
Argentina, Brazil, Mexico and South Africa are among the countries the OECD believes could benefit from the simplified TP rules
It comes despite an offshore enabler penalty existing in the UK throughout the entire period
It is extraordinary that tax advisers in the UK can offer their services without having to join a professional body. This looks like it is coming to an end, Ralph Cunningham writes
Meet the esteemed judges who are assessing the first-ever Social Impact Awards
The ‘big four’ firm has also vowed to spend more on nurturing junior talent; in other news, Blick Rothenberg has hired a pair of tax partners
However, making APAs harder to reach could ‘pose problems’ for UK businesses
Microsoft's director of benefits taxation tells ITR about having no normal days, family inspiration and what makes tax cool
The 61-year-old has run the firm’s UK business since 2020
Gift this article