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BUSINESS TAXATION MINIMUM TAXATION
| The global tax landscape is changing with repercussions for Switzerland and the companies based there. |
| According to the roadmap established by the OECD and the G20 countries, the first elements of a minimum tax should come into force on January 1, 2023. The Federal Council has therefore decided to implement the minimum tax through a constitutional amendment and to ensure, by means of a transitional ordinance, that the minimum tax can be introduced on January 1, 2024. Voters will be called upon to decide on this matter on June 23, 2023. From a tax perspective, Switzerland remains an attractive place for both businesses and individuals, but with the introduction of a global minimum tax on large corporations in mind, some cantons must prepare to tax them more heavily. In light of the reforms envisioned by the OECD and the G20 countries, which plan tointroduce a minimum corporate profit tax rate of 15%, the differences between cantons with low corporate tax rates, such as Zug (11.85%), and Bern (21.04%), which levies high taxes, are expected to diminish. However, the OECD's proposed minimum 15% tax rate will only apply to companies with annual revenues exceeding €750 million. In French-speaking Switzerland, the cantons of Vaud and Geneva have set their corporate profit tax rates at 14%, Neuchâtel at 13.57%, Fribourg at 13.87%, Valais at 17.12%, and Jura at 16%. Compared to the OECD's minimum rate of 15%, the difference is not very large, and these cantons will only need to make minor adjustments to comply with OECD rates. In German-speaking Switzerland, the canton of Zug leads the ranking with a rate of 11.9%, followed by Nidwalden (12.0%) and Lucerne (12.2%). With a rate of 21.0%, the canton of Bern is at the bottom. 2022 Corporate Tax Rates in Switzerland:  In international comparison, companies are taxed lightly in Switzerland. Rates lower than those in low-tax cantons are only found in traditional offshore jurisdictions, Guernsey, Qatar, and a few Eastern (Southeast) European countries. Ireland remains Switzerland's main competitor in Europe. Internationally, large Swiss companies will also be subject to the same rules as those located in cities like Singapore, Hong Kong, or Dubai, which will also have to raise their tax rate to 15%. There will therefore be fewer incentives encouraging companies to relocate to such locations solely for tax reasons. For very large corporations, tax competition between cantons will play a less significant role as a factor in future location decisions. Whether these corporate tax developments will have consequences for personal income tax remains to be seen. Income tax rates in Switzerland 2022  |