by On 12 January 2022, Switzerland’s Federal Council decided to implement the minimum tax rate for companies that was agreed by the OECD and G20 member states in 2021. The 15% minimum tax, which will be applied to large companies from 1 January 2024, will generate extra tax revenue. This week, after a degree of wrangling, the government agreed to split the extra tax collected 75%/25% in favour of the cantons. © Ginasanders | Dreamstime.comThe new rate of 15% will be applied to all companies with turnover in excess of 750 million euros. The higher rate was not disputed. However, friction emerged over the split of the extra CHF 1 to 2.5 billion tax revenue the new rate would generate. Some argued that more of the extra money should go to Bern given the increasing demands being placed on
Topics:
Investec considers the following as important: Business & Economy, Editor's Choice, Personal finance, Politics, Tax Switzerland
This could be interesting, too:
Investec writes Swiss health care costs continued to rise in 2022
Investec writes Swiss parliament rejects adding dental care to basic insurance
Investec writes Study shows how Swiss doctors and hospitals overcharge
Claudio Grass writes Is gold too expensive to buy right now?
On 12 January 2022, Switzerland’s Federal Council decided to implement the minimum tax rate for companies that was agreed by the OECD and G20 member states in 2021. The 15% minimum tax, which will be applied to large companies from 1 January 2024, will generate extra tax revenue. This week, after a degree of wrangling, the government agreed to split the extra tax collected 75%/25% in favour of the cantons.
The new rate of 15% will be applied to all companies with turnover in excess of 750 million euros. The higher rate was not disputed. However, friction emerged over the split of the extra CHF 1 to 2.5 billion tax revenue the new rate would generate.
Some argued that more of the extra money should go to Bern given the increasing demands being placed on it, for example, money to support the nation through the Covid pandemic and money to support rising numbers of refugees. Political parties with a preference for redistribution from wealthy cantons to poorer ones generally supported a 50%/50% split.
However, in the end a 75%/25% split was put forward by the Federal Council and it was accepted by majorities in parliament and the Council of States. How cantons and municipalities will split the extra money remains open. This is something that will be decided locally.
Lifting company tax to a universal 15% requires a change to Switzerland’s constitution. To do this requires a referendum, which is set to take place on 23 June 2023.
More on this:
RTS article (in French) – Take a 5 minute French test now
For more stories like this on Switzerland follow us on Facebook and Twitter.