Switzerland’s privileged taxation of holdings as well as mixed and domiciliary companies has been under increasing international pressure since 2007; particularly from the European Union and the OECD. The federal and cantonal governments responded to this pressure by drafting the corporate tax reform package CTR III ("Federal Act on Tax-Related Measures to Strengthen the Competitiveness of Switzerland as a Business Location"). Under dispute from the outset, a referendum was launched against its implementation. Despite support for the reform by the Federal Council, Parliament and 25 cantonal governments, Swiss voters rejected the new law on 12 February 2017. Although the rejection of CTR III sends the federal and cantonal governments back to the drawing board, it remains widely undisputed among the package’s supporters and opponents alike that reform is required. Thus, a new proposal will likely be proposed in the near future.

Measures to retain Switzerland’s attractiveness as a business location

Maintaining and further developing Switzerland’s position as one of the most attractive business locations worldwide remains an essential aim. As is increasing and sustaining international acceptance of Switzerland’s corporate tax legislation in alternate proposals similar to CTR III while further securing adequate tax revenues to finance public activities. The focus continues to be providing legal certainty and investment security, while increasing the general competitiveness of the tax system and abolishing special tax regimes. A new solution will likely further focus on the fiscal impact of the overall reform. It is possible that some cantons will already take a step in this direction and reduce their ordinary income tax rates in order to swiftly provide legal certainty.

Stay on top of current developments regarding Swiss Corporate Tax Reform III

KPMG Switzerland is following the reform process closely, both from a political and an economic perspective. You get the latest updates and analysis from our tax experts, who are able to regularly provide you with prompt and comprehensive insights. Should you wish to discuss and review how these alternative measures impact the tax planning setup of your group in Switzerland, please contact us.

Key contacts

Peter Uebelhart, Head of Tax, Member of the Executive Committee

Stefan Kuhn, Head of Corporate and M&A Tax, Region Zurich and Ticino

Your regional contacts

Reiner Denner, Region Basel

Markus Vogel, Region Central Switzerland

Hans Jürg Steiner, Region Berne

Peter Michael, Region Eastern Switzerland

Vincent Thalmann, Region Western Switzerland

CTR III rejected

CTR III rejected

The Swiss public has rejected the Corporate Tax Reform III. Get some first impressions from Martin Naville and Peter Uebelhart on this outcome.

How will the OECD and the EU react to the CTR III’s rejection?

See what Vinod Kalloe, Head of International Tax Policy, KPMG Meijburg & CO, and former senior policy adviser at the European Commission (EC) has to say.

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Comparison of Cantons

Percentage of tax revenues originated from privileged taxed companies.

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