Switzerland still competitive despite US tax reforms, says economics minister

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The economics minister said the relaunch of its own tax reform plans could help Switzerland stay competitive with the US. (Keystone) - Click to enlarge

Swiss Economics Minister Johann Schneider-Ammann says he does not think sweeping US tax reforms will drive American firms from Switzerland.

In an interview with the Schweiz am Wochenende newspaper on Saturday, he said Switzerland also has competitive advantages for companies.

The minister nevertheless recognised that US President Donald Trump’s tax reforms are attractive for business, and that American companies will likely reflect on whether to go back. Nevertheless, he said, they should consider how long the tax advantages will last, which is not at all clear at present.

Schneider-Ammann also pointed out that moving a corporate headquarters is not something to be done lightly, as those who have done it know.

US companies already have attractive conditions in Switzerland, Schneider-Ammann told the paper, and Switzerland has the means to remain competitive, notably through the relaunch of tax reform plans and constant improvements in other general conditions.

+ Read more about tax reform in Switzerland

In December last year, Trump promulgated the most sweeping tax reforms that the US has seen for 30 years. They include cutting corporate tax rates from 35% to 21%. Companies will also be able to repatriate profits generated abroad at rates varying from 8% to 15.5% for a limited period.

Corporate tax rates in Switzerland vary according to canton, but remain generally competitive, a recent survey found. It nevertheless warned that the US tax reforms will increase competition.