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Dominik Birrer
Partner Tax, PwC Switzerland
The constitutional article on the implementation of the OECD minimum taxation at 15% for multinational groups with an annual consolidated revenue of EUR 750 million or more is signed and sealed. The National Council resolved the last remaining differences with the Council of States.
The last open points were related to the questions
- how the expected additional tax revenues shall be split between cantons and the federal level and
- whether parliament should prescribe to the cantons how exactly they should share the expected additional cantonal revenue with cities and municipalities.
With respect to the first point, a proposal by the WAK-N that wanted to set the federal share with respect to the expected additional tax revenues at 50% (instead of the proposed 25%) had previously found a majority at the level of the national council. On the second point, some members of the national council wanted to add precise specifications to the law with respect to the extent that cities and municipalities shall be remunerated by cantons.
In the final vote on 16 December 2022, the national council and council of states now agreed that 75% of the additional tax revenues would go to the cantons where the companies paying the additional revenue are located and the remaining 25% will go to federal government. Furthermore, the text that has now been adopted merely states that cities and municipalities must be taken into account appropriately by the cantons with no further specification added how this should happen in detail. This is both in line with the original proposal/communication of the federal council.
With this final vote at parliament level, another major step to implement the OECD minimum taxation rules in Switzerland has been completed. The constitutional amendment will be subject to public vote in June 2023 and if that vote is positive then Switzerland will continue to be on track to implement the rules with effect from 1 January 2024. Hence, it is in line with the foreseen timeline of the European Union that shall apply these new measures in respect of the fiscal years beginning on or after 31 December 2023 - the European Union just formally adopted a directive for the implementation of the OECD minimum taxation rules in the various EU countries last week (see here for more details).
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