CTR III – The Swiss federation and cantons must go back to the drawing board

in Tax, 13.02.2017

The corporate tax reform, recommended by Federal Council, Parliament and 25 cantonal governments, did not find a majority in the Swiss public. The reform foresaw an abolishment of the cantonal tax status with simultaneous implementation of replacement measures in order to secure the attractiveness of Switzerland.

The demand of companies for restoration of legal certainty and the pressure of the EU on the abolishment of the cantonal tax status continues, wherefore Federal Council and cantons cannot avoid to hammer out immediately a new draft.

No change for status companies at first glance

After the public no, status companies like holding, domicile and mixed companies as well as principal companies and finance branches still benefit temporarily from a lower taxation in comparison to other corporations

Presumably as from January 1, 2018 information about tax rulings which concern privileged companies and which are foreign related need to be exchanged at international level if they were granted as from January 1, 2010 and are still applicable as from January 1, 2018.

Reduction of the cantonal income tax foreseeable

Some cantons have announced a reduction of their income and capital tax rates ahead of the referendum resp. already determined a reduction. Since for cantons with the public no new tax instruments (replacement measures) were denied, there remains in principle only the reduction of the ordinary income tax rates in the short term, in order to retain important mobile companies. In many cases this would require an even more extensive tax rate reduction than in combination with the tax instruments, in order to be effective.


For the restoration of legal certainty and avoidance of new discussions with the OECD, it is mandatory that Federal Council and Parliament present a new legislative draft soon. Simultaneously, it is quite likely that smaller cantons and especially such with comparatively many status companies will move on.



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