Since 2007, Switzerland’s privileged taxation of holdings, mixed and domiciliary companies has been under increasing international pressure, in particular from the European Union and the OECD. The federal and cantonal governments have reacted and are currently reshaping the Swiss tax legislation. The Federal Council submitted the dispatch on the "Federal Act on Tax-Related Measures to Strengthen the Competitiveness of Switzerland as a Business Location" to Parliament in June 2015. While the Upper Chamber made a first decision on the draft legislation in the 2015 winter session, the Lower Chamber did this in the 2016 spring session. We are currently going through the procedure for reconciling the versions of the two chambers, which should be completed in June or possibly in September. The time limit for a potential referendum on the reform will then run for 100 days.
The aim of Corporate Tax Reform III is to maintain and further develop Switzerland’s position as one of the most attractive business locations worldwide, while increasing international acceptance of its corporate tax legislation and sustainably securing adequate tax revenues to finance public activities.
The focus is on providing legal certainty and security of investment while also increasing the general competitiveness of the tax system and abolishing special tax regimes.
The reform is based on the following pillars:
Percentage of tax revenues originated from privileged taxed companies
After completion of the procedure for reconciling the different versions as between the Upper and Lower Chambers, the final votes are expected to be in June (or possibly September) and the new legislation could come into force by January 2017 and be implemented into cantonal law by January 2019. If a referendum is held, a delay of one to two years might have to be taken into account.
KPMG in Switzerland is closely following the efforts of decision makers from both the political and the industry perspective. Hence, our tax experts are able to regularly provide you with prompt and comprehensive in depth insights.
Should you wish to discuss and review the tax planning set-up of your group in Switzerland in the light of these changes, please contact us.
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