Nowhere are the ethics of international tax competition more closely discussed than in relation to Switzerland.
Supporters of the Swiss approach applaud the government, and the cantonal and local authorities for their aggressive use of the tax system to increase investment, for example, through favourable terms for holding companies. Opponents, such as the European Commission, believe Switzerland does not compete fairly for money from multinational companies, taking valuable funds away from EU member states.
Switzerland's national, cantonal and local tax rules are not all about cutting rates to as low as they can go. As the articles in this guide show, it is a much more sophisticated system than many realise.
Lenz & Staehelin look at the dialogue on tax under way between Switzerland and the EU, and pick out some of the features of Swiss tax rules that make them so attractive to overseas investors.
As far as PwC is concerned, Corporate Tax Reform III, which will review, among other things, obstacles in the system, is key to Switzerland's future as a favourable tax environment. Another article from the same firm considers the importance of a sustainability review if multinational companies want to get the most from using a principal company structure in Switzerland. A third article from PwC warns that Switzerland should beware of making any changes to its VAT law that will be detrimental to investors, for example, in how collective investment vehicles are treated.
While Schellenberg Wittmer acknowledges that the Swiss criminal tax law needs to evolve, it says reformers should bear in mind the effects of any changes on topics such as taxpayers' rights.
Cross-border situations and strict reporting requirements for employers are the focus of changes to the taxation of employee participation plans, explain Burckhardt.
Multinational companies can gain some real advantages from where they exploit their intellectual property and Switzerland is a good place to do that, believes Deloitte. An article from the same firm looks at whether Swiss safe harbour interest rates also apply to cross-border intra-group loans.
KPMG says investors who set up a vehicle to purchase Swiss real estate should have one eye on the time when they want to sell the investment.
And on the topic of an attractive tax system, Tax Partner – Taxand argue that the abolition of issuance stamp duty on debt capital and a wide and growing tax treaty network are two measures that Switzerland has used to stay tax competitive.
Ralph Cunningham
Managing editor
International Tax Review
