by Novartis only generated 2% of its revenue in Switzerland but paid 39% of its tax bill there. Switzerland stands to lose up to CHF10 billion (.2 billion) as a consequence of attempts by other countries to change how multinationals are taxed. Countries belonging to the G20 and OECDexternal link are pushing for changes in corporate taxation rules to capture a larger share of taxes of multinationals based in tax-friendly destinations like Switzerland. They want companies to pay taxes where they generate their sales and not just where they are located. They also want all firms to be subject to minimum taxation. Finance Minister Ueli Maurer had hinted at shortfalls of between CHF1-5 billion in the Swiss treasury if
Topics:
Swissinfo considers the following as important: 3) Swiss Markets and News, Featured, newsletter, Politics
This could be interesting, too:
Guillermo Alcala writes USD/CHF slides to test 0.8645 support with US inflation data on tap
Swissinfo writes Swiss central bank posts CHF62.5bn profit
Nachrichten Ticker - www.finanzen.ch writes Trump-Faktor und Marktbedingungen könnten für neuen Bitcoin-Rekord sorgen
Charles Hugh Smith writes Is Social Media Actually “Media,” Or Is It Something Else?
Novartis only generated 2% of its revenue in Switzerland but paid 39% of its tax bill there.
Switzerland stands to lose up to CHF10 billion ($10.2 billion) as a consequence of attempts by other countries to change how multinationals are taxed.
Countries belonging to the G20 and OECDexternal link are pushing for changes in corporate taxation rules to capture a larger share of taxes of multinationals based in tax-friendly destinations like Switzerland. They want companies to pay taxes where they generate their sales and not just where they are located. They also want all firms to be subject to minimum taxation.
Finance Minister Ueli Maurer had hinted at shortfalls of between CHF1-5 billion in the Swiss treasury if these measures are implemented. However, the NZZ am Sonntag paper claims the country could lose up to CHF10 billion if the impact of tax revenues of cantons and municipalities are taken into account.
The pharmaceutical company Novartis was used as an example to illustrate the consequences. The company recently achieved global sales of just under CHF51 billion, of which only 2% was generated in Switzerland. Conversely, Novartis paid a total of CHF 1.8 billion in income taxes, 39% of which were in Switzerland. If Novartis were hypothetically taxed entirely according to where the sales were generated, Switzerland would only net CHF36 million instead of the CHF700 million it gains now.
It is unlikely the proposed tax regime would be as harsh, but Switzerland will have to pay a price. To avoid a worst-case scenario the Alpine nation is trying to align with other potential losers like Netherlands, Ireland, Luxembourg and the Scandinavian states, as well as Canada and Singapore. Switzerland invited these and other states in May to coordinate their efforts and seek alternative solutions.
Tags: Featured,newsletter,Politics