INTERNATIONAL TAX PLAZA - The Swiss Federal Council arranges for the implementation of the OECD minimum tax rate in Switzerland

Details: Published: 23 June 2022

On June 23, 2022 the Swiss Federal Council issued a press release announcing that in order to implement the OECD/G20 Two Pillar solution it is proposing a supplementary tax.

The supplementary tax is limited to large corporate groups with worldwide turnover of at least EUR 750 million that are below the minimum taxation of 15%.

The Confederation is to receive 25% of the receipts from the supplementary tax. These additional funds will be earmarked to cover the additional national fiscal equalization (NFE) expenditure and to promote the attractiveness of Switzerland as a business location. The proposal is thus budget-neutral for the Confederation.

The cantons will receive 75% of the receipts. The cantons actually affected by the minimum tax rate will thus receive the funds to safeguard their appeal as a business location. They can decide for themselves how the funds are to be used, but the communes must be appropriately taken into account.

In view of the time schedule the Federal Council has decided to proceed in stages. A new constitutional standard will empower the Confederation to implement the OECD/G20 project. In a second step, the Federal Council will regulate minimum taxation by means of a temporary ordinance. Afterwards, a federal law will replace the ordinance.

In this respect the Swiss Federal Council issued the following 3 documents:

A message concerning the federal decree on a supplementary taxation of large business groups (Implementation of the joint project of the OECD and the G20 on the taxation of the digital economy) (Available in German, French and Italian);
A draft federal decree on supplementary taxation of large business groups (Available in German, French and Italian); and
Report of the results of the consultation on the federal decree on supplementary taxation of large business groups (implementation of the joint OECD and G20 project on the taxation of the digital economy) (Available in German, French and Italian).

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