The question facing the Swiss federal government is how to keep Swiss corporate taxes attractive without offering foreign companies preferential tax rates, a system that the Organisation for Economic Co-operation and Development (OECD) and the European Union (EU) will no longer tolerate.
The Swiss Federal Council, the seven-member executive council which constitutes the federal government, recently opened consultations on its plans to reform taxes. These consultations close on 31 January 2015 and changes to the system of taxation will apply from 2019.
Two cantons that have much to lose are Geneva and Vaud. These cantons have relatively high corporate tax rates and host a large number of foreign companies that enjoy preferential tax rates. So for these cantons to move to a single corporate tax rate is likely to be costly.
According to Swissinfo, the plans under consideration include new capital gains taxes, hiring 70 to 80 new tax inspectors and finding spending cuts of one billion. The capital gains tax, which is expected to bring in CHF 300 million per year, is being strongly criticized by the political Right, notes 24 heures.