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Switzerland: New 2020 tax law, canton of Ticino

Switzerland: New 2020 tax law, canton of Ticino

The deadline for the referendum against the new Ticino tax law expired on 7 January 2020; thus, the corporate tax law adjustments are effective retroactively to 1 January 2020.

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The canton of Ticino implemented the Federal Act on Tax and AVS Financing (TRAF) in its tax legislation. Together with the adjustments required by TRAF, the first step of the new cantonal law includes a reduction of the corporate income tax rate from 9% to 8% and a reduction of the cantonal tax base from 100% to 97%, dropping the average effective tax rate for corporate taxpayers from 19.81% to 18.47%.

The main element of the tax reform is the repeal of tax privileges (for holding, mixed, and principal companies). The transitional measures are expected to provide certain relief for those companies benefiting from the privileged taxation regime up to 2025.

  • In addition, the patent box regime provides for a reduced taxation of profits from patents and comparable rights, with a reduction of 90% of the tax base.
  • The increased research and development (R&D) expenses of 50% for the calculation of the taxable profit is also part of the new tax package.

The tax reform will reach its full potential in 2025, with a further reduction of the effective corporate income tax rate to 15.4% and the introduction of differentiated communal tax multipliers for corporate and individual taxpayers.

Read a January 2020 report prepared by the KPMG member firm in Switzerland

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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