Legislation (known in English as the “Federal Act on Tax Reform and AHV Financing”) was accepted by Parliament on 28 September 2018. This legislation is subject to an optional referendum with a key date in mid-January 2019. If a referendum is called, a public vote could be held on 19 May 2019.
More than 10 years ago, the European Union, and later the OECD, began to look at Switzerland regarding the country’s privileged taxation of holdings—both mixed and domiciliary companies. Switzerland’s first attempt to respond, in the form of the Corporate Tax Reform III (CTR III), was rejected by Swiss voters on 12 February 2017.
The Federal Council and cantons turned to take another attempt at potential responses. Following a new consultation process, the Federal Council submitted its dispatch on Tax Proposal 17 (TP17) to Parliament in March 2018. This proposal was influenced by CTR III—but was a “slimmed-down” version. Parliament made some amendments to TP17 and also linked it with a social equalization measure to secure additional financing of the old age and survivors’ insurance (AHV). The result was the combined Federal Act on Tax Reform and AHV Financing that was accepted by Parliament on 28 September 2018.
In principle, the tax reform pursues the same three main objectives as CTR III:
The legislation focuses on legal and investment security and generally to enhance the competitiveness of the Swiss tax system, while repealing certain tax regimes. The loss of these tax regimes is to be cushioned in various ways, including cantonal measures. In a next step, it is up to the cantons to implement their respective measures based on the framework offered by the Confederation.
Certain measures of the tax reform package include the following (read more in a blog item posted by the KPMG member firm in Switzerland).
Read a September 2018 report prepared by the KPMG member firm in Switzerland
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