The Federal Council sets the key parameters for the message on Tax Proposal 17.

On December 6, the consultation period for the Tax Proposal 17 ended. The Federal Council has now evaluated the results and defined the key parameters for the message of the Tax Proposal 17 during its session on January 31, 2018. The message is to be drafted by the end of March.

The Key Parameters

‍The consultation process for the Tax Proposal 17 lasted from September 6, 2017, until December 6, 2017 (Findea reported). Since then, the Federal Council has acknowledged the results of the consultation process and decided on the key parameters of the message for the Tax Proposal 17 in its session on January 31, 2018. Here, the Federal Council largely follows the consultation draft. This includes making patent boxes mandatory for all cantons, which means that in the future, the revenue from patents and comparable rights will be separated from the rest of the profits and taxed at a lower rate. Additionally, extra voluntary deductions for research and development expenses are planned.

The most significant deviation from the consultation draft concerns the cantonal share of the direct federal tax. In the consultation draft, it was still planned to increase this from 17% to 20.5%. It is now proposed that this be increased even to 21.2%.

‍Tight Schedule

‍The "No" to the Corporate Tax Reform III in February 2017 put the authorities under considerable time pressure, as an adjustment to corporate taxation is urgently necessary. The current legal situation is no longer compatible with international standards, negatively affecting the attractiveness of Switzerland as a business location. Therefore, the Federal Council has envisaged a tight schedule for Tax Proposal 17. Thus, the federal finance department is to draft the message by the end of March. Ideally, parliamentary deliberation could then be completed in the autumn session 2018. If no referendum occurs, the first adjustments could already come into effect at the beginning of 2019. Further information can be found here.

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