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Corporate Tax Reform III - New Tax Proposal 2017 (TP17)

9 September 2017
KENDRIS Author(s): 

The Swiss people has voted on 12th February 2017 with a clear 59.1% against implementation of the corporate tax reform III.

Minister of finance, Mr. Ueli Maurer, has announced that a federal working group will come together shortly in order to analyse the background of the negative voting of the Swiss people.  He has also announced that due to the complexity of the bill it will at least take one year from now to present an amended corporate tax reform III bill. Following the negative vote a steering body, consisting of federal and cantonal representatives, met a total of five times between March and May in order to develop a new tax proposal 2017.

Beginning of June the new core elements of the tax proposal 17 were presented to the public. The core elements consist among others of the following:

  • Introduction of a patent box for income from patents and similar intangible rights
  • Research and development deductions may not exceed 50% of the actual costs
  • Partial taxation of dividends newly to be 70% (on both, federal and cantonal level)
  • Vertical equalization; the Confederation will newly pay 20.5% of the direct federal tax to the cantons

The Federal Council decided on the core elements of the new tax proposal 17 in the course of June. Thereafter, the Federal Department of Finance has prepared a consultation draft. The Federal Council has opened the consultation period on 6th September 2017. The consultation period will last for three months and end on the 6th December 2017. It is expected that the dispatch of the consultation draft will be adopted in spring 2018 and could then be approved by the parliament in its summer / autumn session at the earliest.

Due to the rejection of the initial corporate tax reform III bill by the Swiss people the deadline of 1st January 2019 as demanded by the OECD will not be met. Any changes to the corporate taxation will be implemented by the 1st January 2020 at the earliest. For the time being this means that the status quo will remain unchanged. Thus the following tax privileges will remain in force: holding taxation, taxation of mixed companies as well as taxation of domiciliary companies.