Swiss corporate tax rates ‘likely to fall’ in some cantons

by
Swissinfo
My articles My booksMy videos
Follow on:TwitterFacebookGoogle +

Places like Vevey in canton Vaud are tipped to lower rates in the face of impending corporate tax reforms (Keystone) - Click to enlarge

Impending corporate tax reforms are likely to reduce rates in higher tax cantons, such as Geneva, Vaud and Basel City, according to KPMG. Overall, the business consultancy group expects Switzerland to remain an attractive location for multinational corporations.

Little has changed in the Swiss corporate and income tax landscape, with cantons in central Switzerland like Zug offering attractive rates in international comparisons, the latest KMPG Clarity on Swiss Taxesexternal link report concludes.

However, companies are bracing themselves for changes in the coming years. Having failed to get corporate tax changes past Swiss voters last year, the government has tweaked its plans. They will substantially alter the corporate tax landscape in the next two to three years if they pass muster in parliament and at the polls.

Instead of handing foreign multinationals tax breaks on overseas earnings, cantons will attempt to lure companies of all shapes and sizes with special deals on research and development expenditure. That will benefit some business models, but not commodities traders and holding companies, KMPG said on Wednesday.

If, as expected, higher tax cantons – many of which have a high proportion of foreign company HQs – are forced to reduce rates as a result of the reforms, Switzerland would remain an attractive location. KPMG doubts that competitor countries, such as Ireland, have room to reduce their rates much lower.