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Switzerland Pushing Forward With New Tax Proposals

by Ulrika Lomas, Tax-News.com, Brussels

02 February 2018


The Swiss Federal Council has agreed on the outline of the new tax reform package that will be presented to Parliament next month.

The Council said that it agreed on the parameters for the dispatch on tax proposal 17 (TP17) on January 31. The Federal Department of Finance has been instructed to prepare the dispatch by the end of March. Together with the dispatch, the FDF will also prepare an estimate of the financial implications of TP17 for the confederation and the cantons.

The Council explained that the agreed parameters are closely aligned with the proposals it presented for public consultation last September.

The Council will continue to pursue the introduction of a mandatory patent box for all cantons, and the introduction of optional additional deductions for research and development expenditure. Dividends from qualified participations will be taxed at 70 percent at federal level, and at at least 70 percent at cantonal level, with a relief restriction set at 70 percent.

The main innovation is that the Council wishes to raise the cantons' share of direct federal tax from 17 percent to 21.2 percent. The original proposal had been for a share of 20.5 percent.

The Council said that it would also like to adopt the dispatch on TP17 at the end of March, so that parliamentary debate on the proposals can be concluded as early as the 2018 autumn session.

If a referendum is not called, the first TP17 measures could enter into force at the beginning of 2019, with the majority entering into force from 2020.

The Council said that reform is urgently needed, due to increasing international pressure.

TAGS: tax | tax incentives | corporation tax | Switzerland | tax breaks | dividends | tax reform | research and development | BEPS

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