On 12 January 2022, the Federal Council decided to implement the minimum tax rate for companies that was agreed by the OECD and G20 member states last year. The 15% minimum tax rate is to come into force on 1 January 2024.
The new minimum 15% tax rate, which will apply to multinational companies with turnover of more than EUR 750 million, was agreed by 137 countries. Under the agreement, if a country maintains lower tax rates then other countries can impose an additional tax on those undertaxed companies.
The Federal Council will issue a temporary ordinance that implements the minimum tax rate as of 1 January 2024. Final laws to replace the ordinance can then be prepared in an ordinary legislative procedure without time pressure.
Nothing will change for purely domestically focused and smaller companies.
Implications for Switzerland as an attractive business location
Certain companies will face a heavier tax burden, said the government. However, the minimum rate will spare them additional tax proceedings abroad and Switzerland will have fiscal policy leeway to counteract a possible loss of attractiveness as a business location, it said.
The federal government will work with cantons and municipalities to implement the change. The Federal Department of Finance has set up a political consultative body in which all three levels of government are represented.
Several years ago, Switzerland reformed the way it taxed companies after years of pressure from the EU and the OECD. A number of cantons, especially those that had a large number of multinationals paying lower preferential tax rates, aimed to maintain their attractiveness by lowering the universal corporate tax rate. In Vaud the company rate fell from 21.65% to 13.79%. In Geneva the rate fell from 24.2% to 13.49%.