On June 18, 2023, the Swiss people and cantons approved the federal decree on special taxation of large corporate groups by a large majority.
This gave the Federal Council the authority to temporarily implement the OECD/G20 minimum taxation by ordinance. The transitional provision in the Federal Constitution provides for a so-called supplementary tax. Within six years of the ordinance coming into force, the Federal Council must submit a law to Parliament to replace the Minimum Tax Ordinance (MindStV).
The minimum taxation is implemented in the form of a national supplementary tax. With this supplementary tax, Switzerland ensures a minimum domestic taxation of 15 percent for large, internationally active corporate groups with a turnover of more than 750 million euros. This prevents tax revenue from flowing out of Switzerland and abroad.
The transitional provision in the Constitution contains key requirements for the ordinance. Within the framework of these requirements, the Federal Council has followed the following guidelines when implementing minimum taxation in Switzerland:
International compatibility
The Swiss regulations should be internationally accepted in order to provide companies based in Switzerland with the greatest possible legal certainty. To this end, the regulation must comply with the OECD/G20 regulations.
Safeguarding Switzerland’s economic interests
Where the OECD/G20 regulations explicitly permit or provide for it, leeway and options should be used in the interests of Switzerland as a business location.
Avoiding administrative hurdles
The administrative burden for companies and cantonal tax administrations should be kept as low as possible.
In principle, the proposed structure of the national supplementary tax met with broad approval during the consultation process. However, the Federal Council has made adjustments and additions to take account of the consultation results.
It has also determined that the requirements for the supplementary tax to come into force in Switzerland on January 1, 2024 have been met, as the vast majority of EU member states and other western industrialized nations such as the UK and South Korea will implement the regulations on the same date. On the other hand, the Federal Council is refraining from implementing the international supplementary tax IIR and UTPR for the time being. It will monitor further international developments in this regard and decide on their introduction at a later date if this is appropriate in order to safeguard Switzerland’s interests.
