Switzerland Consulting on Draft Legislation for Implementation of Minimum Tax

On 11 March 2022, the Swiss Federal Council issued a release announcing the submission of draft legislation for consultation for the implementation of the global minimum tax according to Pillar 2 of the OECD's two-pillar solution for international tax reform. The deadline for the consultation is 20 April 2022 and will not be extended.

As explained in the release, the Federal Council intends to guarantee minimum taxation according to Pillar 2 by introducing a "supplementary tax". The top-up tax will, with regard to large corporate groups (EUR 750 million annual consolidated revenue), bridge the gap between the effective tax rate and the minimum tax rate of 15%, insofar as the effective tax rate is lower at 15%. This will not entail any changes for all other businesses, in particular SMEs.

The new supplementary tax will be applied by the cantons. The release also notes that because the implementation of the minimum tax will result in a difference in treatment between the companies concerned and others, the creation of a new constitutional norm is required to empower the Federal Council to subject companies to different tax rates. Further, in order for the new rules to come into force on 1 January 2024, it is noted that the Federal Council must be empowered by means of a transitional provision to temporarily regulate the minimum tax by means of an ordinance. As soon as the application of the international rules is sufficiently clear, Parliament will pass a federal law repealing the temporary ordinance.

source Orbitax

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