Tax Proposal 17 – cornerstones for implementation in the Canton of Zug

in Tax, 07.06.2017

Following the Swiss electorate’s no to the Corporate Tax Reform III (CTR III) on 12 February 2017, it was of greatest importance for all of Switzerland, but also for the internationally-oriented business location of Zug, to clarify the economic and taxation framework conditions for internationally operating companies with a political majority-backed proposal within a reasonable period of time and to improve planning security and legal certainty.

After the steering body comprised of federal and cantonal representatives has adopted recommendations on a balanced tax proposal 17 for the attention of the Federal Council, the Canton of Zug has confirmed the cornerstones for the cantonal implementation of TP17.

The planned cornerstones for the Canton of Zug are:

  • Reduction of the ordinary combined corporate income tax rate to around 12% (today approx. 14.6%)
  • Introduction of a patent box with a cantonal tax relief of 90%
  • Cantonal tax deduction of 150% for research and development
  • Limitation of maximum relief at 70%
  • Adjustments in respect of capital taxation
  • Abolition of the privileged tax regimes for holding, mixed and domicile companies
  • Increase taxation of qualifying dividends to 70% (today 50%)

Depending on the progress made on a federal level, the cantonal government is expecting to begin consultation for a cantonal implementation in April 2018, so that the amendments can come into effect by 2020.



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