Tax deal: small countries ‘should not be forgotten’ says Swiss minister

US Treasury Secretary Janet Yellen, (centre), arrives for a G20 meeting on Friday, the first one to be held in person since the pandemic began Copyright 2021 The Associated Press. All Rights Reserved

The interests of small innovative countries must be taken into account in international corporate tax measures, says Swiss Finance Minister Ueli Maurer, who has been attending the G20 meeting in Italy.

Discussed at the meeting of finance ministers and central bankers of 20 major economies was the landmark Organisation for Economic Cooperation and Development (OECD) agreement on a global corporate minimum tax, which was rubber stamped by 130 OECD countries on July 1.

G20 finance ministers welcomed the key points of the tax reform at their meeting, the Swiss Federal Department of Finance said in a statement on Saturday eveningExternal link. Maurer was attending the G20 as a guest of Italy, as Switzerland is not a member of the G20.

The reform sets a tax rate of at least 15% and would tax more of the profits of the biggest multinationals in countries where the profits are earned. Switzerland has already said it would go along with the agreement, despite its reservations.

The G20 endorsement paves the way for leaders to finalise the reform at a Rome summit in October. But first the OECD has to come up with a detailed plan on how to implement the reform, leaders said.

Swiss view

“Minister Ueli Mauer called for the interests of small innovative countries to be taken into account,” the Swiss statement said, reiteratingExternal link a position set out in a statement on July 1.

In a press conference held later on Saturday evening, Maurer added that international tax reform was inevitable. Concrete steps had not yet been drawn up, but there was agreement at the G20 about taking the path.

Fears have already been raised that a global minimum corporate tax rate could threaten Switzerland’s status as a hub for multinational company headquarters. Certain cantons could come under pressure, experts say.

Companies

On the 15% minimum tax rate, Maurer said this was not yet set in stone, but it looked likely. Companies with a turnover of or more than €750 million will be affected, so more than 250 Swiss companies. Added to this are foreign multinationals based in Switzerland, an estimated 3,000-4,000.

Maurer said that the international reform’s deadline was ambitious – 2023. Switzerland, which has 26 cantons with their own finance laws, would not manage this, he added.

The Venice meeting participants also discussed the unevenness of the global economic recovery as well as support for developing countries hard hit by the Covid 19 pandemic. A panel of experts is to prepare a report on countering future pandemics for the October meeting, the Swiss statement said.