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Switzerland Implements 15% Minimum Corporate Tax Law

A federal decree, proposed by the OECD in its two-pillar international tax plan, on the implementation of the minimum corporate tax on large multinational businesses has been signed off by Swiss lawmakers.


Countries will introduce a global minimum corporate tax rate of 15% under Pillar Two. The minimum tax will apply to multinational enterprises (MNEs) with revenue above EUR 150m. The so-called Global Anti-Base Erosion (BLoBE) rules provide for a co-ordinated system of taxation intended to ensure large MNE groups pay this minimum level of tax on income arising in each of the jurisdictions in which they operate. The rules create a “top-up tax” to be applied on profits in any jurisdiction whenever the effective tax rate, determined on a jurisdictional basis, is below the minimum 15% rate.


The Federal Council explained that it intends to guarantee minimum taxation according to pullar two of the joint project of the PECD and the G20 by introducing a “supplementary tax” which will bridge the gap between the effective tax rate and the minimum tax rate of 15%. The tax would be applied by the cantons and the Government expects to implement the measure from January 1, 2024.


The effective federal corporate tax rate in Switzerland is just 7.83% but this tax burden is increased by corporate taxes also imposed by the cantons - other than for holding companies that are exempt, which vary.


Both houses of the Swiss legislature signed off on implementation on December 16, 2022.


Lawmakers also signed off on legislation for the implementation of a new social security agreement with the UK and a new double tax agreement with Ethiopia, and to make changes to the country’s double tax agreement with Armenia.


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