Countries belonging to the G20 and OECDExternal link are pushing for changes in corporate taxation rules to capture a larger share of taxes of multinationals based in tax-friendly destinations like Switzerland. They want companies to pay taxes where they generate their sales and not just where they are located. They also want all firms to be subject to minimum taxation.
Finance Minister Ueli Maurer had hinted at shortfalls of between CHF1-5 billion in the Swiss treasury if these measures are implemented. However, the NZZ am Sonntag paper claims the country could lose up to CHF10 billion if the impact of tax revenues of cantons and municipalities are taken into account.
The pharmaceutical company Novartis was used as an example to illustrate the consequences. The company recently achieved global sales of just under CHF51 billion, of which only 2% was generated in Switzerland. Conversely, Novartis paid a total of CHF 1.8 billion in income taxes, 39% of which were in Switzerland. If Novartis were hypothetically taxed entirely according to where the sales were generated, Switzerland would only net CHF36 million instead of the CHF700 million it gains now.
It is unlikely the proposed tax regime would be as harsh, but Switzerland will have to pay a price. To avoid a worst-case scenario the Alpine nation is trying to align with other potential losers like Netherlands, Ireland, Luxembourg and the Scandinavian states, as well as Canada and Singapore. Switzerland invited these and other states in May to coordinate their efforts and seek alternative solutions.
More
More
Switzerland continues to lure foreign companies
This content was published on
Switzerland is in the throes of revamping its corporate tax system to keep it line with the competition rules of the European Union and Organisation for Economic Cooperation and Development (OECD). Many cantons are reducing their headline tax rates to make up for having to ditch special perks for multinational companies that locate offices and…
Swiss regulator criticises banks for being lax with mortgages
This content was published on
Switzerland's financial watchdog has condemned a tendency for banks to apply less stringent internal guidelines for granting mortgage loans.
Uber drivers subject to the law on services in Geneva
This content was published on
The Federal Court has ruled against a Geneva-based company, a partner of Uber, which challenged its liability under the law on the hiring of services.
Swiss nuclear power plants are not at risk from flooding
This content was published on
According to an inspection by the Swiss Federal Nuclear Safety Inspectorate, the safety-relevant buildings of the Swiss nuclear power plants are not at risk.
Swiss Fairtrade label breaks billion franc barrier in sales
This content was published on
Products with the Fairtrade Max Havelaar label generated sales of more than CHF1 billion in Switzerland for the first time last year.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Switzerland votes ‘yes’ to overhaul corporate tax rules
This content was published on
Switzerland voted yes on Sunday to a reform of the corporate tax system that will scrap preferential treatment for multinational firms.
Switzerland losing attractiveness for multinationals
This content was published on
Once the ideal destination for multinationals to set up shop, Switzerland is being outpaced by other European hubs like the Netherlands.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.