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New Tax Proposal 2017 (TP17)

5 February 2018
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 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 for the first time. The Federal Council has set the parameters in January 2018 which will be contained in the dispatch on tax proposal 17 (TP17). These parameters (core elements) deviate only minimal from the initial parameters as contained in the consultation draft:  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 21.2% (instead of currently 17%) of the direct federal tax to the cantons

The consultation period was opened on 6th September 2017 and has ended on 6th December 2017. The Federal Council would like to adopt the dispatch on TP17 at the end of March 2018. It is contemplated that the deliberations of the parliament can be concluded in the 2018 autumn session.

Provided that the Swiss people will not reject the TP17, the deadline of 1st January 2019 as demanded by the OECD might be met at least for some measurements of the TP17. The major measurements will however only be introduced as of 2020. 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.