Switzerland: Corporate tax reform in Canton of Vaud

Switzerland: Corporate tax reform in Canton of Vaud

Proposals for corporate tax reform—referred to as “Corporate Tax Reform III” or CTR III—aim at maintaining Switzerland’s attractiveness for international headquarters. The government of the Canton of Vaud (where many multinational entities have their international global or regional headquarters) in late September 2015 passed the first political hurdle, when it adopted a cantonal CTR III plan that would replace various tax regimes questioned by the OECD with new tax planning tools to maintain and strengthen the attractiveness of the region.

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Among the proposed changes are measures to reduce the corporate tax rate from the current rate of 22.33% to 13.79% by 2019. 

Parallel to cantonal discussions, the CTR III will also be discussed in the Swiss Federal Parliament in the winter session (starting 30 November). The federal changes also could affect taxation in the Canton of Vaud, because the federal tax harmonization law sets (and might change) the framework for further changes in the cantonal tax regimes and because the entry into force of the Vaud CTR III is directly linked to the federal law enforcement. The cantonal tax rate, however, is not part of it but entirely in the competence of the cantons.

 

Read an October 2015 blog posting by the KPMG member firm in Switzerland: Vaud: Corporate Tax Reform passes the first political hurdle

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