On 5 June 2015, the Swiss Federal Council published Corporate Tax Reform III for debate in parliament. The legislation is designed to boost trust in Switzerland and strengthen its position as a tax domicile. If parliament reinstates the notional interest deduction, Switzerland will be able to retain its place among the most attractive locations for doing business.
Topics of this article
Reform project: background and current status
Important reform for Switzerland
The reforms in detail
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Dating back more than thirty years, the current rules on corporate taxation – particularly the tax regimes that are due to be abolished – have been a major factor in Switzerland’s success. Plans to do away with these rules have created a great deal of legal uncertainty, raising the question of how competitive Switzerland will remain in terms of attracting international businesses.
This uncertainty came to an end when the CTR III reform package was released for parliamentary debate on 5 June 2015. Provided that parliament re-adopts the notional interest deduction, the package will contain the reform elements necessary to ensure Switzerland remains among the most attractive tax jurisdictions for corporations.
Given that Swiss public finances are in relatively good shape by international standards and that the will exists on the part of parliamentarians and the general public to adopt and implement CTR III, Switzerland will be able to preserve its reputation as a reliable, long-term, business-friendly location and an attractive tax jurisdiction for international companies. The new corporate tax legislation will help ensure the continuing success of the Swiss model in the coming decades.