Swiss voters on 19 May 2019 will vote on the “Federal Act on Tax Reform and AHV Financing” (TRAF). At the same time, the implementation process is progressing at the cantonal level, with some cantons having held (or about to hold) referendums.
The tax reform proposal on the federal level provides for the repeal of what are no longer internationally accepted tax regimes. Effective implementation of the tax reform, however, only would take place at the cantonal level, in the cantonal tax laws. This applies in particular to the cantonal tax rate reductions that are also part of the reform strategy but are not formally part of the federal bill.
If the vote on 19 May 2019 is a “yes” vote, as planned, the reform would be effective 1 January 2020. The regulation concerning a temporary special tax rate solution would be effective after the referendum vote. The cantons will thus be able to make use of this measure early in order to mitigate the de facto tax increase for those companies that plan to waive their cantonal tax status.
In the event of a “no” vote, the Federal Council would have to act quickly and determine that the tax regimes criticized by the OECD and the EU are repealed—potentially together with increasing the cantonal share of federal tax revenue and adjusting the fiscal equalization system. Otherwise, it might be possible that Switzerland could be “blacklisted” by the EU.
Read a 2019 report prepared by the KPMG member firm in Switzerland
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