On August 17, 2022 we already reported that the Swiss Federal Council opened a public consultation on a Draft Ordinance to implement a minimum taxation for large multinationals (Pillar 2 of the OECD’s Two-Pillar solution). The Draft Ordinance contains 11 Articles and is only 4 pages long.
The Swiss lawmakers very efficiently drafted the Ordinance. By laying down a reference to the OECD Model Regulations in Article 2, Paragraph 1 of the Ordinance, these OECD Model Regulations are transferred into Swiss national law. Insofar as the Model Regulations relate to the international supplementary tax (the IIR) they are to be applied directly as such. Insofar as the Model Regulations relate to the Swiss supplementary tax (the UTPR), which Switzerland opts to introduce, they are to be applied "by analogy" because the OECD Model Regulations only regulate the levying of the international supplementary tax.
It should be noted that the reference as laid down in Article 2, Paragraph 1 of the Ordinance is a static reference. This means that the Ordinance refers to the Model Regulations as they apply on the date the Ordinance enters into force (which is now foreseen to be January 1, 2024). Future amendments to the OECD Model Regulations will not automatically apply to Switzerland. The Swiss Federal Council will review a later revision of the Model Regulations for their legal conformity and amend the ordinance if necessary.
By choosing the implementation method as described above the Swiss Federal Council saved itself and the governmental employees a lot of work. They needed to draft a very limited number of Articles to implement Pillar 2 into Swiss law. But also tax professionals should be happy with the way the Swiss chose to implement Pillar 2. By referring to the OECD Model Regulations the Swiss lawmakers have also made the lives of tax professionals easier, because the latter will not have to review whether differences exist between the (Swiss) national legislation and the OECD Model Rules.
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