Tax Proposal 17 – Canton of Lucerne comments on the Federal Council’s dispatch on the Tax Proposal 17


On Thursday, 22 March 2018, the Governing Council of Lucerne commented the Federal Council’s dispatch on the Tax Proposal 17 (TP17). Lucerne’s Finance Director Marcel Schwerzmann acknowledges the urgency of a corporate tax reform and supports the approach of the Federal Council. After various tax law revisions in the past years, the Canton of Lucerne considers itself well positioned to implement TP17 and intends to keep the level of corporate income tax low. The Canton of Lucerne will implement the replacement measures, if at all, hesitantly.

The Canton of Lucerne plans to implement specific aspects of TP17 as follows:

  • Maintaining the corporate income tax rate: Since 2011, Lucerne has with 12.32% the lowest corporate income tax rate of all cantons. Therefore, the canton sees no need for a reduction of the rate in the context of TP17. The corporate income tax rate will not be reduced even if certain other cantons are striving for a slightly lower tax rate than the Canton of Lucerne will have.
  • Patent box: The canton of Lucerne sees little need for action in this area and will provide a cantonal tax relief of 10%.
  • Additional R&D deductions: The increase in R&D deductions proposed by the Federal Council is optional. The canton of Lucerne does not want to introduce the additional deductions.
  • Dividend taxation: The Lucerne Government Council welcomes the planned increase in the taxation of qualifying dividends to 70%. The canton has planned to take over the federal solution.
  • Capital taxation: The Lucerne Department of Finance sees a need for action on capital taxes. Therefore, the needs are to be analyzed in more detail and, if necessary, actions proposed to the Government Council.

The canton of Lucerne is also positively emphasizing the increase in the cantonal share of the Direct Federal Tax from currently 17% to 21.2%, as well as additional income from the national financial equalization scheme as from 2024.

Read more about the Tax Proposal 17.

This blog is also available in German.

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