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Corporate Tax Reform Act III

13 February 2017
KENDRIS Author(s): 

In the referendum held on the 12th of February 2017, the Swiss people voted by a clear majority (59.1% of voters) against the implementation of the Corporate Tax Reform III Bill.

Minister of Finance, Mr. Ueli Maurer, has announced that a federal working group will come together shortly in order to analyse the reasons for the rejection of the proposed reforms.  He has also announced that due to the complexity of the issues it will at least take one year from now to present a revised bill.  It is expected that any new proposal will need to two take into account two main conclusions from the vote.  Firstly, middle class votes will not accept an increase in personal taxes in order to finance any shortfall in corporate tax revenues and secondly, the new bill must not be as complex as the recent one in order for the Swiss people to better understand it.

The OECD has previously demanded that the Swiss corporate tax regime be reformed by no later than 1 January 2019. However, in view of the negative outcome of the vote, this will no longer be possible and any changes to corporate taxation will be implemented by 1 January 2021 at the earliest. For the time being this means that the status quo will remain unchanged. Consequently, the existing advantages enjoyed in respect of taxation of holding companies, ‘mixed’ companies and domiciliary companies will remain in force.