News on Corporate Tax Reform III: Referendum on February 12

Corporate Tax Reform III has been long debated in parliament and will now go to a public vote on February 12, 2017. Find out what the reform aims to accomplish and what options are available to the cantons in this post.

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What does the reform aim to achieve?

Switzerland has so far not taxed profits earned abroad by certain companies as highly as those earned domestically. This practice made Switzerland an attractive business location for foreign companies. The EU and the OECD no longer accept this. As a result, the privileges for holding and management companies must be abolished. In the future, all companies will pay the same amount of taxes. To prevent companies from relocating, the reform aims to improve the tax conditions for all companies. The extent and design of corporate taxes, however, largely depend on the cantonal tax laws. They would suffer the greatest tax losses with the reform, as the old tax privileges are abolished (for details see the article by NZZ). To compensate, the cantons' share of the direct federal tax will be increased from 17 to 21.2%. This in turn means a loss of taxes at the federal level.The cantons have the following options to better position companies tax-wise: