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Switzerland will apply minimum tax – with or without the US

Keller-Sutter
Finance Minister Karin Keller-Sutter speaking at the WEF on Wednesday © Keystone / Laurent Gillieron

If Swiss voters approve the minimum tax reform in June, the government will implement it even if the United States does not, says Finance Minister Karin Keller-Sutter.

“The situation with the US is somewhat complicated,” Keller-Sutter admitted at the annual gathering of the World Economic Forum (WEF) on Wednesday, referring to the discussions on the Foreign Account Tax Compliance Act (FATCA).

As the initiator of a minimum tax of 15% for companies, the US could apply the regulation in its own way. The US is powerful enough to do this, she said. But Switzerland would be forced to introduce the minimum tax if all other OECD countries did so.

At the heart of the OECD/G20 tax reform is a minimum tax of 15% for all companies with a turnover of more than €750 million (CHF740 million) a year. According to the government, around 2,000 companies in Switzerland would be affected by the reform.

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Parliament has already approved the reform. Since the new taxation requires a constitutional amendment, the Swiss population will vote on it in June.

If accepted, an entry into force is planned for January 2024. However, Switzerland could wait for the other players if they were not ready, Keller-Sutter said. “People underestimated the details of this reform,” she said.

Tax reform has been the focus of most of Keller-Sutter’s meetings at the WEF. In particular, she exchanged views on it with her counterparts from Germany, Luxembourg and Poland, as well as with the OECD Secretary-General. She also met Paolo Gentiloni, European Commissioner for Economy.

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